[CPAIN2K17]

I am having a lot of trouble with equivalent units calculations. I feel like I understand the topic, but when I get a question asking me to calculate on MQs, I’m always lost. Does anyone have any tips? I struggled with this topic during college in Cost, and apparently nothing has changed. Thanks..

[Smeegle]

Is there somewhere specific you get lost when faced with these problems??

These problems are some of my favorite because theyre generally the same and you follow the same steps to solve them each time. First, determine whether FIFO or W.A. method. Then apply EU calculation accordingly. If FIFO: Beg WIP* % to complete + Units Completed- Beg WIP + End WIP % Percent Complete will get you EU. Then to get Cost/EU use current costs only/EU. I remember current cost only because beginning is already included in EU for FIFO.

If W.A. Units Complete + End WIP * % Complete to get EUs. Then Beginning Cost+Current Cost/ EUs for Cost/EU. I remember you need to add Beginning Cost because you dont touch beginning WIP to get EU.

[CPAIN2K17]

Thank you, your post was very helpful!

Whether to add in beg inv cost was confusing to me because I wasn’t sure if it would just be a % of the cost since a % was complete, but according to your post. For weighted avg I would add the complete % cost to the current costs and divide by EUs. And for FIFO I would not include any beg inv costs at all.

Thanks again, this was very helpful.

[Author]

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