COMM 2020 Lecture Notes - Lecture 3: Weighted Arithmetic Mean
19 Apr 2016
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Book problem 6-29: beg balance = 30,000 units, units started = 150,000 units, ending balance 15,000 units, 30+150-15 = 165,000 units = units completed during period, equivalent units. Wip direct materials inventory end of year 15,000 * 0. 70 = 10,500 completed. So total equivalent units from materials = 165+10. 5=175,500 equivalent units. Wip conversion costs end of year 15,000 * (0. 60) = 9000 completed. So total equivalent units from conversion = 165+9 = 174,000 units. So units completed: 4+4. 85-2. 4 = 6. 45 million units finished during period: equivalent units under weighted average: Direct materials: (2. 4 million * 1. 0)+ 6. 45 = 8. 85 million units. Conversion: (2. 4 million * 0. 60) + 6. 45 = 7. 89 million units, equivalent units under fifo: Weighted average treated the beginning balance as if it were new stuff starting that month. 30+50-20=60,000 units completed during period: equivalent units weighted average. 60,000 + (20,000 * 1. 0) = 80,000 equivalent units.
