Sharp Corporation has a process costing system. The following data relate to the company's Mixing Department for a recent month: UnitsConversion Percent Complete Beginning work in process inventory5,00060%Units started into production40,000 Units completed and transferred out37,000 Ending work in process inventory8,00025% All materials are added at the beginning of the Mixing process.Required:a. Compute the equivalent units of production for materials and conversion using the weighted-average method.b. Compute the equivalent units of production for materials and conversion using the FIFO method.
What will be an ideal response?
a. Weighted-average method equivalent units of production
| Materials | Conversion | |
| Units transferred to the next department | 37,000 | 37,000 |
| Ending work in process inventory: | ||
| Materials: 8,000 units × 100% | 8000 | |
| Conversion: 8,000 units × 25% | 2,000 | |
| Equivalent units of production | 45,000 | 39,000 |
b. FIFO method equivalent units of production
| Materials | Conversion | |
| To complete beginning work in process inventory: | ||
| Materials: 5,000 units × (100% ? 100%) | 0 | |
| Conversion: 5,000 units × (100% ? 60%) | 2,000 | |
| Units started and completed (37,000 - 5,000) | 32,000 | 32,000 |
| Ending work in process inventory: | ||
| Materials: 8,000 units × 100% | 8,000 | |
| Conversion: 8,000 units × 25% | 2,000 | |
| Equivalent units of production | 40,000 | 36,000 |
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