Brian’s Frozen Pizzas uses FIFO process costing. Selected production and cost data follow for April 2018.

	Prepping department
Units to account for:
Beginning work-in-process, March 31	20,000
Started in April	45,000
Total units to account for	65,000
Units accounted for:
Completed and transferred out during April:
From beginning work-in-process inventory	20,000
Started and completed during April	30,000
Ending work-in-process, April 30	15,000
Total units accounted for	65,000

Requirements

1. Calculate the following:

a. On March 31, the Prepping Department beginning Work-in-Process Inventory was 75% complete for materials and 55% complete for conversion costs. This means that for the beginning inventory % of the materials and % of the conversion costs were added during April.

b. On April 30, the Prepping Department ending Work-in-Process Inventory was 60% complete for materials and 85% complete for conversion costs. This means that for the ending inventory % of the materials and % of the conversion costs were added during April.

2. Use the information in the table and the information in Requirement 1 to compute the equivalent units of production for direct materials and conversion costs for the Prepping Department.

Step by step solution

01

Step-by-Step Solution:Step 1: Work-in-process Inventory

The work-in-process inventory means the inventory which is not completed through the processing at the end of the reporting period. This inventory is required to be completed by further processing.

02

Step 2: For the opening WIP inventory, material and the conversion cost added during April

$$\begin{gathered} \mathbf{Direct}\mathbf{}\mathbf{material}\mathbf{=}\mathbf{100}\mathbf{\%}\mathbf{-}\mathbf{Completion}\mathbf{\%}\mathbf{}\mathbf{for}\mathbf{}\mathbf{material} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{100}\mathbf{\%}\mathbf{-}\mathbf{75}\mathbf{\%} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{25}\mathbf{\%} \end{gathered}$$

$$\begin{gathered} \mathbf{Conversion}\mathbf{}\mathbf{costs}\mathbf{=}\mathbf{100}\mathbf{\%}\mathbf{-}\mathbf{Completion}\mathbf{\%}\mathbf{}\mathbf{fo}\mathbf{}\mathbf{Conversion}\mathbf{}\mathbf{costs} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{100}\mathbf{\%}\mathbf{-}\mathbf{55}\mathbf{\%} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{45}\mathbf{\%} \end{gathered}$$

03

For the ending WIP inventory, material and the conversion cost added during April

$$\begin{gathered} \mathbf{Direct}\mathbf{}\mathbf{material}\mathbf{=}\mathbf{Completion}\mathbf{\%}\mathbf{}\mathbf{for}\mathbf{}\mathbf{}\mathbf{material} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{60}\mathbf{\%} \end{gathered}$$

$$\begin{gathered} \mathbf{Conversion}\mathbf{}\mathbf{costs}\mathbf{=}\mathbf{Completion}\mathbf{\%}\mathbf{}\mathbf{for}\mathbf{}\mathbf{Conversion}\mathbf{}\mathbf{costs} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{85}\mathbf{\%} \end{gathered}$$

04

Equivalent unit of production for direct material

Particulars	No. of units
Beginning WIP (20,000 x 25%)	5,000
Started and completed units (30,000 x 100%)	30,000
In process units (15,000 x 60%)	9,000
Total EUP for direct materials	44,000

05

Equivalent unit of production for conversion costs

Particulars	No. of units
Beginning WIP (20,000 x 45%)	9,000
Started and completed units (30,000 x 100%)	30,000
In process units (15,000 x 85%)	12,750
Total EUP for conversion costs	51,750

Unlock Step-by-Step Solutions & Ace Your Exams!

• Full Textbook Solutions

  Get detailed explanations and key concepts

• Unlimited Al creation

  Al flashcards, explanations, exams and more...

• Ads-free access

  To over 500 millions flashcards

• Money-back guarantee

  We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!