Answered

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Gantner Company had the following department information about physical units and percentage of completion: Physical Units Work in process, May 1 (60%) 60000 Completed and transferred out 180000 Work in process, May 31 (40%) 50000 If all materials are added at the beginning of the production process, what is the total number of equivalent units for materials during May

Sagot :

Zviko

Answer:

200,000 units by Weighted Average Cost Method

164,000 units by FIFO Method

Explanation:

1. Where Weighted Average Cost Method is used.

Assuming that Gantner Company uses the Weighted Average Cost Method, the total number of equivalent units for materials during May can be determined as follows :

Completed and transferred out (180000 x 100)      180,000

Ending Work In Process (50000 x 40%)                   20,000

Total equivalent units for materials                          200,000

1. FIFO Method is used.

Assuming that Gantner Company uses the FIFO Cost Method, the total number of equivalent units for materials during May can be determined as follows :

To Complete Opening Work in Process (60000 x 40%)        24,000

Completed and transferred out (180000 - 60,000) x 100%  120,000

Ending Work In Process (50000 x 40%)                                  20,000

Total equivalent units for materials                                        164,000

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