[Broag]

Okay. My mind has melted over this for probably an hour now. According to Ninja notes (2016 version), to calculate EFU Weighted Average for Direct Materials (DM) you go:

Units shipped
+ EI x % complete for DM
= EFU WA

I came across the following question today and it says that you treat EI as 100% complete in regards to DM, yet Ninja notes says you take a % of DM and multiply it by EI. So what am I missing here? Are the notes wrong or is the question wrong? Please help…

The following information pertains to Lap Co.’s Palo Division for the month of April:

Number of Units Cost of Materials
————— —————–
Beginning work-in-process 15,000 $ 5,500
Started in April 40,000 18,000
Units completed 42,500
Ending work-in-process 12,500

All materials are added at the beginning of the process. Using the weighted-average method, the cost per equivalent unit for materials is:

A.
$0.59.

B.
$0.55.

C.
$0.45.

Correct D.
$0.43.

REG - 79
FAR - ?
AUD - ?
BEC - ?

[candidate2017]

All materials are added at the beginning of the process. so,
Units completed 42,500 x 100% complete = 42,500 EU
Ending work-in-process 12,500 x 100% complete = 12,500 EU
Total EU=55,000

Total cost =5,500+18,000= $23,500

23,000/55,000=.43 (rounded)

Hope this helps

[Broag]

Thank you. So if the materials were added DURING the manufacturing process we'd use a percentage? What would we do if we added the materials at the end of the process? Just want to make sure I understand this fully.

Thank you.

REG - 79
FAR - ?
AUD - ?
BEC - ?

[Author]

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