Chapter 18: Q6SE (page 1008)

Refer to Short Exercise S18-5. At Spring Fresh, water is added at the beginning of the filtration process. Conversion costs are added evenly throughout the process. Now assume that in February, 155,000 liters were completed and transferred out of the Filtration Department into the Bottling Department. The 45,000 liters remaining in Filtration’s ending Work-in-Process Inventory were 80% of the way through the filtration process. Recall that Spring Fresh has no beginning inventories.
Compute the equivalent units of production for direct materials and conversion
costs for the Filtration Department.

Short Answer

Expert verified

The equivalent unit of production for direct material is 195,000 liters, and the conversion cost is 191,000 liters.

Step by step solution

Step-by-Step Solution:Step 1: Direct Material Cost

Direct material cost means the cost incurred by the company on the raw material and other components which are directly used in the manufacturing of the final products.

Equivalent unit of production for direct material

$EUP for direct material = (Completed units \times Completion percentage) + (WIPunits \times Completion percentage) = (155, 000 \times 100 %) + (45, 000 \times 100 %) = 195, 000 liters$

Equivalent unit of production for conversion costs

$EUP for conversion costs = (Completed units \times Completion percentage) + (WIP units \times Completion percentage) = (155, 000 \times 100 %) + (45, 000 \times 80 %) = 191, 000 liters$

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!

Recommended explanations on Business Studies Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

1. Direct labor plus manufacturing Overhead	a. Expresses partially completed units in terms of fully completed units
2. Prepared by department for EUP, production costs, and assignment of costs	b. Used by companies that manufacture homogenous products
3. Equivalent units of production	c. Previous costs brought into later process
4. Process costing system	d. Conversion costs
5. Transferred in costs	e. Combines prior period costs with current period costs
6. Weighted-average method	f. Production cost report

Wages of workers operating the clarification equipment	$20,000
Manufacturing overhead allocated to clarification	24,000
Water	160,000

Short Answer

Step by step solution

Step-by-Step Solution:Step 1: Direct Material Cost

Equivalent unit of production for direct material

Equivalent unit of production for conversion costs

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Business Studies Textbooks

Strategic Direction

Introduction to Business

Human Resources

Business Development

Operational Management

Influences On Business

Study anywhere. Anytime. Across all devices.