Production Company

The following data is for a production company:

Beginning inventory 1,000 units, three-fourths completed

Finished and transferred 16,000 units

Work in process, end of month 2,000 units, one-half completed 

Assume that materials, labor, and factory overhead are added evenly throughout the process.

On a separate sheet of paper, complete the following problems.

Label each answer carefully and show all your work.

a. Using the average cost method, compute the equivalent production.

b. Using the first-in, first-out method, compute the equivalent production.

c. During the month, Department B received 10,000 units from Department A with a unit cost of $10; 2,000 of these units were lost during production in Department B.

Determine the adjusted cost of these units.

d. During the month, Department 2 received 8,000 from Department 1 with a unit cost of $15. Department 2 added materials that increased the number of units by 50%. Determine the adjusted cost of these units.