[jlee1086]

In their example, Becker gives 3 components to FIFO

1. WIP Beginning: 100 * 75%= 75
2. Completed – beginning inventory= 600 – 100= 500
3. WIP Ending: 100 * 75%= 75

But this problem is has something the lectures don’t prepare you for.

Kimbeth Manufacturing uses a process cost system to manufacture Dust Density Sensors for the mining industry. The following information pertains to operations for the month of May 2012:

Beginning work in process inventory, May 1 16,000
Started in production during May 100,000
Completed production during May 92,000
Ending work in process inventory, May 31 24,000

The beginning inventory was 60% complete for materials and 20% complete for conversion costs. The ending inventory was 90% complete for materials and 40% complete for conversion costs.

Here is the answer explanation:

Completed units 92,000
Plus: Equivalent units in ending inventory (24,000
× 90%) 21,600
Less: Equivalent units in beginning inventory
(16,000 × 60%)
(9,600)
Equivalent units of production 104,000

Why don’t you take 100% of beginning inventory out of completed units like you do in the example? If it’s because you do it to WIP and not inventory, Becker didn’t make a single peep about that

 

 

FAR 57 (11/2014), 64 (1/2015), 79 (7/2015)
AUD 68 (2/2015), 79 (11/2015)
REG 79 (1/2016)
BEC 81 (4/2016)

[Biff-1955-Tannen]

I'm not sure why the example has it like that.
EDIT: Looking at the example again, I don't think that is saying those are the “completed units”, it seems to me like it is saying “completed – beginning” will equal the units “started and completed” this period. Which is not really relevant for the calculation. I would just ignore that.

The problem you posted below is the correct way to do it.
Using FIFO method, it is: Completed units – Beginning WIP Equivalent Units + Ending WIP Equivalent Units.

Using Weighted Average method is just two components: Completed + Ending WIP Equivalent Units

AUD - 93
BEC - 83
FAR - 83
REG - 84

Nobody calls me chicken

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[FAR_WARS]

My Becker shows the answer calculated like this:

Beg WIP * (1-%complete)
+(units complete – beg WIP)
+(end wip * % complete)

(Question CPA-03634 is DM)

16 * (1-.6) = 6.4
+92-16 = 76
+(24*.9) = 21.6

= 104

(Question CPA-03637 is Conversion Costs)

16 * (1-.2) = 12.8
+(92-16) = 76
+(24*.4) = 9.6
=
98.4

FAR- 80
BEC- 75
AUD- 78
REG- ?

[jlee1086]

I see I forgot to do 1-% for beginning WIP. The Wiley way (from the problem I posted) is so much easier to remember, as there are no unnecessary steps.

FAR 57 (11/2014), 64 (1/2015), 79 (7/2015)
AUD 68 (2/2015), 79 (11/2015)
REG 79 (1/2016)
BEC 81 (4/2016)

[Anonymous]

delete

[Anonymous]

delete

[Author]

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