[bigcore20]

Becker Question –

Has anyone else run into a problem with the comprehensive example for process costing under FIFO and Weighted Average? I’m referring to page B1-54&55. I felt completely comfortable with this until I saw this comprehensive example.

I understand the formulas in the pass key and seem to get all the class questions right, but here are my issues with the example:

1) FIFO is 3 steps – it uses beg. WIP x the % to be completed. The example shows Units in process at May 1 (materials) of 4,000 units at 100% complete. The answer key shows 0 for that which I would agree if 100% means there is 0% to be completed. But then for units started and completed (again materials only for now) it shows 100% of 10,000 and the answer key shows $10,000. Shouldn’t this be (10,000 completed – beginning 4,000 = 6,000)? Then you would add the ending units times the percentage completed (in this case 100% of 2,000).

2) Weighted average is 2 steps: Units completed plus ending units in process times percentage completed. Easy. However, the answer key shows 4,000 in beginning units in process. Why would beginning units play any factor in this if the two steps shown in the book are completed units and percentage of ending units in process completed?

I know that they said WA first part was beginning WIP+ units started and completed. But in the practice problems in the book, you juts use the completed for the first part, then of course ending wip * % for the second part.

Thanks!