Washington State Fisheries, Inc., processes salmon for various distributors. Two departments, processing and packaging, are involved. Data relating to tons of salmon sent to the processing department during May follow: Percent Completed Tons of Salmon Materials Conversion Work-in-process inventory, May 1 1,000 80% 70% Work-in-process inventory, May 31 2,000 50 30 Started processing during May 7,000 Required: 1. Calculate the number of tons completed and transferred out during the month.

1. 6,000 tons

2. Direct Material 7,000

Conversion cost 6,300

3. Direct Material 6,300

Conversion cost 6,400

Explanation:

1. Calculation for the number of tons completed and transferred out during the month.

Using this formula

Units completed and transferred out= Opening WIP + Started processing - Closing WIP

Let plug in the formula

Units completed and transferred out= 1000 + 7000 - 2000

Units completed and transferred out= 6,000 tons

Therefore the number of tons completed and transferred out during the month is 6,000 tons

2. Calculation the number of equivalent units for both direct materials and conversion for the month of May, assuming that the company uses the weighted-average method.

Calculation of Equivalent units

ParticularMaterialconversion cost

%units%units

Units transferred out

100%6,000100% 6000

Finished goods WIP

50% 100030% 300

(50%*2,000=1,000) (30%*1,000=300)

Equivalent units 7,000 6,300

Therefore the number of equivalent units for direct materials is 7,000 and conversion is 6,300

3. Calculation for How would your answer in requirement 2 change if the percentage of completion in ending inventory were as follows: direct materials 30%, conversion 40%

First step is to calculate the New material in finished goods and Conversion cost

New material in finished goods = 1,000*30%

New material in finished goods= 300

Conversion cost = 1,000*40%

Conversion cost = 400

Now let calculate the new equivalent units

Direct Material =6,000+300

Direct Material= 6,300

Conversion cost = 6,000+ 400

Conversion cost = 6,400

Therefore How would your answer in requirement 2 change if the percentage of completion in ending inventory is both 30% and 40% is that Direct Material will be 6,300 and Conversion cost will be 6,400.

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