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Social Science Clinic => Accounting => Topic started by: Redwolflake15 on Mar 6, 2021

Title: Bright Colors Company placed 315,000 gallons of direct materials into the mixing process. All direct ...
Post by: Redwolflake15 on Mar 6, 2021

Bright Colors Company placed 315,000 gallons of direct materials into the mixing process. All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process. Bright Colors uses weighted-average costing. The initial forecast for the end of the month was to have 75,000 gallons still in process, 15% converted as to labor and factory overhead. 

Required: 
a.  Determine the total equivalent units (in process and transferred out) for direct materials and for conversion costs, assuming there was no beginning inventory. 

b.  With the installation of a new paint processing filtration device, the forecast for the end of the month was to have 50,000 gallons still in process, 70% converted as to labor and factory overhead. In this event, determine the equivalent units (in process and transferred out) for direct materials and for conversion costs, assuming there was no beginning inventory.

Title: Bright Colors Company placed 315,000 gallons of direct materials into the mixing process. All direct ...
Post by: parker125 on Mar 6, 2021

a.	Direct materials:

Beginning inventory

0 gallons

Units started

315,000 gallons

Equivalent units

315,000 gallons

 Conversion costs:

Beginning inventory

0 gallons

Units started

315,000 gallons

To account for

315,000 gallons

Units transferred out

240,000 gallons

Ending inventory

75,000 gallons

Units transferred out

240,000 gallons

Ending inventory, 15% complete

11,250 gallons

Equivalent units

251,250 gallons

b.	Direct materials:

Beginning inventory

0 gallons

Units started

315,000 gallons

Equivalent units

315,000 gallons

 Conversion costs:

Beginning inventory

0 gallons

Units started

315,000 gallons

To account for

315,000 gallons

Units transferred out

265,000 gallons

Ending inventory

50,000 gallons

Units transferred out

265,000 gallons

Ending inventory, 70% complete

35,000 gallons

Equivalent units

300,000 gallons