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Sir.
Product. details for process:-
OWIP 400 units 60%complete CWIP600 units 20% complete
Units started 1000 units finished 800
Degree of completion relates to Conversion. 3/4 of materials are added at the start of process and remain. 1/4 added when process is 50% complete. FIFO method is used.
what is the equivalent units for material in the period?Please guide me through.
Please do not simply set test questions and expect a full answer.
You must have an answer in the same book in which you found the question, and you should ask about which bit of the answer is not clear to you.Have you watched our free lectures on process costing?
The opening WIP is already more than 50% complete and therefore no more materials are needed.
A total of 1000 – 600 = 400 units were done from start to finish in the period and therefore have a full 400 units of material.
The 600 units of closing WIP are only 20% complete and therefore have only 3/4 material and so 3/4 x 600 = 150 equivalent units.So total equivalent units = 400 + 150 = 550.
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