Question:
Computing equivalent units, FIFO and average cost methods
Assume each of the following conditions concerning the data given:
1. All materials are added at the beginning of the process.
2. All materials are added at the end of the process.
3. Half of the materials are added at the beginning of the process, and the balance of the materials is added when the units are three-fourths completed. In all cases, labor and factory overhead are added evenly throughout the process.
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Production Summary
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Dept. 1
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Dept. 2
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Dept. 3
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Work in process, beginning of month
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3,000
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1,500
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1,200
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Stage of completion
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1/2
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3/5
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4/5
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Started in process
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18,000
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16,000
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21,000
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Finished and transferred
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19,000
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15,500
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21,000
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Work in process, end of month
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2,000
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2,000
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1,200
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Stage of completion
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3/4
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1/2
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1/4
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Compute separate equivalent units of production, one for materials and one for labor and factory overhead, for each of the conditions listed, using (a) the average cost method and (b) the FIFO cost method