Perhitungan Biaya Berdasarkan Proses (Process Costing)

PERHITUNGAN BIAYA BERDASARKAN PROSES (PROCESS COSTING) Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

LEARNING OBJECTIVES 1. 2. 3. 4. 5. 6.

Memberikan contoh-contoh dari bisnis yang menggunaan perhitungan biaya berdasarkan proses Menjelaskan tiga pola umum dari aliran produksi Menentukan apakah sistem perhitungan biaya  berdasarkan proses dapat digunakan, berdasarkan pemeriksaan terhadap lingkungan manufaktur Menghitung produksi ekuivalen dan biaya departemental per unit Membuat laporan biaya produksi departemental  berdasarkan perhitungan biaya biaya rata-rata tertimbang Membuat ayat jurnal umum untuk mencatat biaya produksi dalam sistem perhitungan biaya berdasarkan proses

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

LEARNING OBJECTIVES 1. 2. 3. 4. 5. 6.

Memberikan contoh-contoh dari bisnis yang menggunaan perhitungan biaya berdasarkan proses Menjelaskan tiga pola umum dari aliran produksi Menentukan apakah sistem perhitungan biaya  berdasarkan proses dapat digunakan, berdasarkan pemeriksaan terhadap lingkungan manufaktur Menghitung produksi ekuivalen dan biaya departemental per unit Membuat laporan biaya produksi departemental  berdasarkan perhitungan biaya biaya rata-rata tertimbang Membuat ayat jurnal umum untuk mencatat biaya produksi dalam sistem perhitungan biaya berdasarkan proses

Persamaan Perhitungan Biaya berdasarkan pesanan (Job Order costing) dan Perhitungan biaya berdasarkan proses (Process Costing) Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

• Kedua sistem membebankan biaya bahan baku, tenaga kerja langsung dan overhead pada produk  dan keduanya menyediakan mekanisme untuk  menghitung biaya produk perunit • Kedua sistem menggunakan akun manufaktur  yang sama, yaitu biaya overhead pabrik, bahan mentah, barang dalam proses dan barang jadi. •  Aliran biaya pada akun-akun manufaktur pada dasarnya sama pada kedua sistem

Perbedaan Job-Order dan Process Costing Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

• Process costing digunakan ketika semua unit dari produk yang dihasilkan dalam suatu pusat biaya adalah serupa (homogen). Job order costing digunakan pada saat produk yang dihasilkan  beragam dalam satu periode. • Pengakumulasiaan biaya pada process costing berdasarkan departemen, sedangkan pengakumulasian biaya job order  berdasarkan pesanan • Sistem Process costing menggunakan laporan produksi per departemen untuk mengakumulasi biaya. Sistem Job-order costing menggunakan kartu biaya pesanan (job cost sheets ) untuk mengakumulasi biaya • Process costing menghitung unit cost per departemen, sedangkan menghitung unit cost per pekerjaan

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Perbandingan Job-Order and Process Costing Bahan Baku Langsung Tenaga Kerja Langsung Overhead Pabrik 

Barang dalam Proses

Barang Jadi

Harga Pokok  Penjualan

Perbandingan Job-Order Biaya ditelusuri dan and Process Costing Cut Afrianandra SE Ak  M.Bus(acc)

Bahan Baku Langsung Tenaga Kerja Langsung Overhead Pabrik 

4/21/2012

ditambah pada masing-masing pekerjaan pada sistem  job order

Pekerjaan (job)

Barang Jadi

Harga Pokok  Penjualan

Perbandingan Job-Order Biaya ditelusuri dan dan Process Costing Cut Afrianandra SE Ak  M.Bus(acc)

Bahan Baku Langsung Tenaga Kerja Langsung Overhead Pabrik 

4/21/2012

ditambah pada masing masing departemen pada sistem process costing Proses (departemen)

Barang Jadi

Harga Pokok  Penjualan

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Summary • Dalam sistem perhitungan biaya berdasarkan proses, bahan baku,tenaga kerja dan overhead pabrik dibebankan ke pusat biaya • Biaya yang dibebankan ke setiap unit ditentukan dengan membagi total biaya yang dibebankan ke pusat biaya tersebut (departemen) dengan total unit  yang diproduksi • Jika praktis dilakukan, perhitungan biaya  berdasarkan proses lebih disukai dikarenakan pencatatan yang lebih sedikit sehingga murah untuk  dioperasikan

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Perusahaan yang menggunakan Process Costing • Industri-industri yang memproduksi komoditas seperti kertas, kayu, pipa, plastik, minyak, tekstil, kawat, bata, semen, tepun gdan gula • Perusahaan-perusahaan yang memproduksi suku cadang sederhana atau komponenkomponen listrik sederhana (paku, mur dan  baut, bola lampu) • Industri perakitan (otomotif, mesin, radio, komputer dan peralatan rumah tangga • Perusahaan gas, air, listrik 

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Aliran Produksi Secara Fisik 1.  Aliran produk berurutan (Sequential Product flow) Setiap produk diproses dalam urutan langkah-langkah  yang sama

2.  Aliran produk Paralel (Parallel Product Flow) Bagian tertentu dari pekerjaan dilakukan secara simultan dan kemudian disatukan dalam satu atau lebih proses final untuk diselesaikan dan di transfer ke barang jadi

3.  Aliran Produk Selektif (Selective Product Flow) Produk berpindah ke departemen-departemen yang  berbeda dalam suatu pabrik, tergantung pada produk final  yang dihasilkan SEE PAGE 176-178

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Cut Afrianandra SE Ak  M.Bus(acc)

Diasumsikan ada 2 departemen proses, yaitu deparyemen A dan B. Kita akan menggunakan T Account dan journal entries.

4/21/2012

Process Cost Flows (in T-account form) Raw Materials •Direct Materials

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

 Work in Process Department A  •Direct Materials

 Work in Process Department B •Direct Materials

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Process Cost Flows (in journal entry form)

GENERAL JOURNAL

Date

Description

Post. Ref.

Page 4 Debit

Work in Process - Department A

XXXXX

Work in Process - Department B

XXXXX

Raw Materials To record the use of direct material.

Credit

XXXXX

Process Cost Flows (in T-account form)  Wages Payable •Direct Labor

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

 Work in Process Department A  •Direct Materials •Direct Labor

 Work in Process Department B •Direct Materials •Direct Labor

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Process Costing (in journal entry form)

GENERAL JOURNAL

Date

Description

Post. Ref.

Page 4 Debit

Work in Process - Department A

XXXXX

Work in Process - Department B

XXXXX

Salaries and Wages Payable To record direct labor costs.

Credit

XXXXX

Process Cost Flows (in T-account form) Manufacturing Overhead • Actual •Overhead Overhea  Applied to  Work in d Process

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

 Work in Process Department A  •Direct Materials •Direct Labor • Applied Overhead

 Work in Process Department B •Direct Materials •Direct Labor • Applied Overhead

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Process Costing (In journal entry form) GENERAL JOURNAL Da te

De scri pti on

Post. Re f.

Page Page 4 De bi t

W ork i n Proce ss - De pa rtm e nt A

X X XX X

W ork i n Proce ss - De pa rtm e nt B

X X XX X

Ma nufa cturi ng Ove rhe a d To apply overhead to departments.

Cre di t

X X XX X

Process Cost Flows (in T-account form)  Work in Process Process Department A  Department A  •Direct Transferred Materials to Dept. B •Direct Labor • Applied Overhead

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

 Work in Process Process Department B •Direct Materials •Direct Labor • Applied Overhead •Transferre d from Dept.  A 

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Process Costing (in journal entry form)

GENERAL JOURNAL

Da te

De scri pti on W ork i n Proce ss - De pa rtm e nt B W ork i n Proce ss - De pa rtm e nt A To record the transfer of goods from  Department A to Department B.

Post. Re f.

Page Page 4 De bi t

Cre di t

X X XX X X X XX X

Process Cost Flows (in T-account form)  Work in Process Department B •Direct •Cost of  Materials Goods •Direct Manufacture Labor d • Applied Overhead •Transferre d from Dept.  A 

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Finished Goods •Cost of  Goods Manufactured

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Process Costing (in journal entry form)

GENERAL JOURNAL

Date

Description Finished Goods Work in Process - Department B To record the completion of goods  and their transfer from Department B  to finished goods inventory.

Post. Ref.

Page 4 Debit

Credit

XXXXX XXXXX

Process Cost Flows (in journal entry form)  Work in Process Department B

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Finished Goods

•Direct •Cost of  •Cost of  •Cost of  Materials Goods Goods Goods •Direct Manufacture Manufactured Sold Labor d • Applied Overhead •Transferre Cost of Goods Sold d from Dept. •Cost of   A  Goods Sold

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Process Costing (in journal entry form)

GENERAL JOURNAL

Date

Description Accounts Receivable

Post. Ref.

Page 4 Debit

Credit

XXXXX

Sales

XXXXX

To record sales on account.

Cost of Goods Sold Finished Goods To record cost of goods sold.

XXXXX XXXXX

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Unit Produksi Equivalent Merupakan jumlah dari suatu sumber daya (seperti  bahan baku, tenaga kerja atau overhead) yang diperlukan untuk menyelesaikan suatu unit produk 

Perhitungan unit ekuivalen diperlukan karena sebuah departemen biasanya mempunyai unit yang selesai sebagian pada persediaan barang awal dan akhir.

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Unit Equivalent – Dasar Pemikiran  Apabila ada 2 produk yang selesai 50%, equivalent dengan satu produk   yang selesai 100%

+

=

1

Jadi, apabila ada 10,000 unit dengan tingkat penyelesaian 70% , equivalent  dengan 7,000 unit selesai

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Quick Check



Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Untuk periode berjalan, PT. Diffa mulai memproduksi 15,000 unit dan unit yang selesai adalah 10,000 unit, dimana 5,000 unit memilik tingkat penyelesaian sebesar 30 persen. Berapakah unit produksi PT. Diffa untuk periode tersebut? a. 10,000  b. 11,500 c. 13,500 d. 15,000

Quick Check



Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Untuk periode berjalan, PT. Diffa mulai memproduksi 15,000 unit dan unit yang selesai adalah 10,000 unit, dimana 5,000 unit memilik tingkat penyelesaian sebesar 30 persen. Berapakah unit produksi PT. Diffa untuk periode tersebut? a. 10,000 10,000 units + (5,000 units ×  b. 11,500 0.30) = 11,500 equivalent units c. 13,500 d. 15,000

Cut Afrianandra SE Ak  M.Bus(acc)

4/21/2012

Calculating Equivalent Units Equivalent units can be calculated two  ways: The

First-In, First-Out Method – FIFO

is covered in the appendix to this chapter. The

Weighted-Average Method – This

method will be covered in the main portion of the chapter.

Equivalent Units of Production Weighted-Average Method The weighted-average method . . . •Makes no distinction between work done in prior or current periods. •Blends together units and costs from prior and current periods.f 

Cost per equivalen t unit

=

Costs for the period Equivalent units of production for the period

Direct Process Costing and Direct Labor Direct labor costs Materials

   t   n   u   o   m    A   r   a Direct    l    l   o Labor    D

Conversion

Type of Product Cost

may be small in comparison to other product costs in process cost systems.

Direct Process Costing and Direct Labor Direct labor costs

   t   n   u   o   m    A   r   a    l    l   o    D

Materials

Conversion

may be small in comparison to other product costs in process cost systems.

Type of Product Cost

Direct labor and manufacturing overhead may be combined into one product cost called conversion.

Weighted-Average Example

Smith Company reported the following activity  in Department A for the month of June: Percent Completed Units

Work in process, June 1

300

Units started into production in June

6,000

Units completed and transferred out of Department A during June

5,400

Work in process, June 30

900

Ma te ria ls Conve rsion 40%

20%

60%

30%

The first step in calculating the equivalent units is to Weighted-Average Example identify the units completed and transferred out of  Department A in June (5,400 units) Materials Units completed and transferred out of Department A in June

5,400

Conversion 5,400

The second step is to identify the equivalent units of  Weighted-Average in process with respect to production in ending workExample materials for the month (540 units) and add this to the 5,400 units from step one. Materials Units completed and transferred out of Department A in June

5,400

Work in process, June 30: 900 units × 60% Equivalent units of Production in Department A during June

540

5,940

Conversion 5,400

The third step is to identify the equivalent units of  Weighted-Average in process with respect to production in ending workExample conversion for the month (270 units) and add this to the 5,400 units from step one. Materials Units completed and transferred out of Department A in June

5,400

Conversion 5,400

Work in process, June 30: 900 units × 60%

540

900 units × 30% Equivalent units of Production in Department A during June

270 5,940

5,670

Equivalent units of production always equals: Weighted-Average Example Units completed and transferred + Equivalent units remaining in work in process Materials Units completed and transferred out of Department A in June

5,400

Conversion 5,400

Work in process, June 30: 900 units × 60%

540

900 units × 30% Equivalent units of Production in Department A during June

270 5,940

5,670

Weighted-Average Example 6,000 Units Materials Started Beginning  Work in Process 300 Units 40% Complete

5,100 Units Started and Completed

5,400 Units Completed 540 Equivalent Units 5,940 Equivalent units of production

Ending  Work in Process 900 Units 60% Complete

900 × 60%

Weighted-Average Example 6,000 Units Conversion Started Beginning  Work in Process 300 Units 20% Complete

5,100 Units Started and Completed

5,400 Units Completed 270 Equivalent Units 5,670 Equivalent units of production

Ending  Work in Process 900 Units 30% Complete

900 × 30%

Production Report – WeightedProduction Report Average  A quantity schedule  Section 1 Section 2 Section 3

showing the flow of  units and the computation of  equivalent units.  A computation of  cost per equivalent unit.

Production Report Production Report

Section 1 Section 2 Section 3

Cost Reconciliation

section shows the reconciliation of all cost flows into and out of the department during the period.

Production Report Example

 Assume that Double Diamond Skis uses the  weighted-average method of process costing to determine unit costs in it Shaping and Milling Department.

Production Report  Work in process,Example May 1: 200 units Materials: 55% complete 9,600 Conversion: 30% complete

$ 5,575

Production started during May 5,000 units Production completed during May  4,800 units Costs added to production in May  Materials cost $ 368,600 Conversion cost 350,900  Work in process, May 31 400 units Materials: 40% complete Conversion: 25% complete

Production Report Example Step1: Prepare Quantity Schedule with Equivalent Units. Units to be accounted for: Work in process, May 1 Started into production Total units

200 5,000 5,200 Equivalent units Materials Conversion

Units accounted for as follows: Completed and transferred Work in process, May 31

4,800 400

4,800

4,800

Production Report Example Step1: Prepare Quantity Schedule with Equivalent Units. Units to be accounted for: Work in process, May 1 Started into production Total units

200 5,000 5,200 Equivalent units Materials Conversion

Units accounted for as follows: Completed and transferred Work in process, May 31 Materials 40% complete

4,800 400

4,800 160

5,200

4,960

4,800

Production Report Example Step1: Prepare Quantity Schedule with Equivalent Units. Units to be accounted for: Work in process, May 1 Started into production Total units

200 5,000 5,200 Equivalent units Materials Conversion

Units accounted for as follows: Completed and transferred Work in process, May 31 Materials 40% complete Conversion 25% complete

4,800 400

4,800

4,800

160 5,200

4,960

100 4,900

Step 2: Calculating the Costs Per Equivalent Unit To calculate the cost per equivalent unit for the period:

Cost per equivalen t unit

=

Costs for the period Equivalent units of production for the period

Step 2: ComputeExample the cost per equivalent unit. Production Report

Total Cost Cost to be accounted for: Work in process, May 1 Costs added in the Shipping and Milling Department Total cost Equivalent units Cost per equivalent unit

$

15,175

Materials

Conversion

$

$

9,600

5,575

719,500

368,600

350,900

$ 734,675

$ 378,200

$ 356,475

4,960

4,900

Step 2: ComputeExample the cost per equivalent unit. Production Report

Total Cost Cost to be accounted for: Work in process, May 1 Costs added in the Shipping and Milling Department Total cost

$

15,175

Materials

Conversion

$

$

5,575

719,500

368,600

350,900

$ 734,675

$ 378,200

$ 356,475

4,960

4,900

Equivalent units Cost per equivalent unit

9,600

$

76.25

$378,200 ÷ 4,960 units = $76.25

Step 2: ComputeExample the cost per equivalent unit. Production Report

Total Cost Cost to be accounted for: Work in process, May 1 Costs added in the Shipping and Milling Department Total cost Equivalent units

$

15,175

Materials

Conversion

$

$

9,600

5,575

719,500

368,600

350,900

$ 734,675

$ 378,200

$ 356,475

4,960

4,900

Cost per equivalent unit $ 76.25 Total cost per equivalent unit = $76.25 + $72.75 = $149.00

$

72.75

$356,475 ÷ 4,900 units = $72.75

Step 3: Prepare a Cost Reconciliation Production Report Example

Total Cost Cost accounted for as follows: Transferred out during May Work in process, May 31: Materials Conversion Total work in process, May 31 Total cost accounted for

Equivalent Units Materials Conversion 4,800

4,800

160 100

Step 3: Prepare a Cost Reconciliation Production Report Example

4,800 units @ $149.00 Cost accounted for as follows: Tra nsfe rre d out during Ma y Work in process, May 31: Materials Conversion Total work in process, May 31 Total cost accounted for

Total Cost $ 715,200

Equivalent Units Materials Conversion 4,800

4,800

160 100

Step 3: Prepare a Cost Reconciliation Production Report Example

160 units @ $76.25 Cost accounted for as follows: Tra nsfe rre d out during Ma y Work in process, May 31: Materials Conversion Total work in process, May 31 Total cost accounted for

Total Cost

Equivalent Units Materials 100 units @Conversion $72.75

$ 715,200

4,800

12,200 7,275

160

19,475 $ 734,675

4,800

100

 All costs accounted for

Operation costing is a hybrid of jobOperation Costing

order and process costing because it possesses attributes of both approaches.

Job-order Costing

Operation Costing (Products produced in batches)

Material Costs charged to batches as in  job-order costing.

Process Costing

Conversion costs assigned to batches as in process costing.

FIFO Method

 Appendix 4A 

FIFO vs. Weighted-Average Method The FIFO method (generally considered more accurate that the  weighted-average method) differs from the weighted-average method in two ways:

1. The computation of equivalent units. 2. The way in which the costs of beginning inventory are treated in the cost reconciliation report.

Let’s revisit the Smith Company example. Assume the following activity is Equivalent Units – FIFO Method reported in Department A for the month of June:

Percent Completed Units Work in process, June 1

300

Units started into production in June

6,000

Units completed and transferred out of Department A during June

5,400

Work in process, June 30

900

Ma te ria ls Conve rsion 40%

20%

60%

30%

Equivalent Units – FIFO Method

Step 1: Determine the number of units completed and transferred out of Department A  in June.

Percent Completed Units Work in process, June 1

300

Units started into production in June

6,000

Units completed and transferred out of Department A during June

5,400

Work in process, June 30

900

Ma te ria ls Conve rsion 40%

20%

60%

30%

Step 2: Add the equivalent units of production in ending Equivalent Units(540 Method – FIFO  work in process inventory units for material and 270 units for conversion) to the units completed and transferred our during June. Materials Units completed and transferred out of Department A in June

5,400

Conversion 5,400

Work in process, June 30: 900 units × 60%

540

900 units × 30% Equivalent units of Production in Department A during June

270 5,940

5,670

Step 3: Subtract the equivalent units in beginning work in process inventory (120 units for materials and 60 units for conversion) from the sum of the units completed and transferred out and the equivalent units in ending work in process inventory.

Equivalent Units – FIFO Method Materials

Equivalent units or Production in Department A during June

5,940

Conversion 5,670

Equivalent units in beginning inventory 300 units × 40%

120

300 units × 20% Equivalent units of Production in Department A during June

60 5,820

5,610

Equivalent Units FIFO Method – 6,000 Units Materials Started Beginning  Work in Process 300 Units 40% Complete

5,400 Units Started and Completed

Units completed and transferred out Equivalent units in ending WIP inventory Equivalent units in beginning WIP inventory Equivalent units of production

Ending  Work in Process 900 Units 60% Complete

Material 5,400 540 (120) 5,820

Equivalent Units FIFO Method – 6,000 Units Conversion Started Beginning  Work in Process 300 Units 20% Complete

5,400 Units Started and Completed

Units completed and transferred out Equivalent units in ending WIP inventory Equivalent units in beginning WIP inventory Equivalent units of production

Ending  Work in Process 900 Units 30% Complete

Conversion 5,400 270 (60) 5,610

Equivalent Weighted vs. are  As shown below,Units: the equivalent units in Average beginning inventory subtracted FIFO from the equivalent units of production per the weightedaverage method to obtain the equivalent units of production under the FIFO method.

Equivalent units - weighted average method Less equivalent units in beginning inventory: 300 units × 40% 300 units × 20% Equivalent units - FIFO method

Materials 5,940

Conversion 5,670

120 5,820

60 5,610

The Production Report - FIFOand Milling Let’s revisit the Double Diamond Skis Shaping Department for the Month of May to prepare our production Method  Work in process, Mayreport. 1: 200 units Materials: 55% complete 9,600 Conversion: 30% complete

$ 5,575 $15, 175

Production started during May 5,000 units Production completed during May 4,800 units Costs added to production in May  Materials cost $ 368,600 Conversion cost 350,900  Work in process, May 31 400 units Materials: 40% complete

The Production Report - FIFO Method

Step 1: Prepare the quantity schedule and compute equivalent units.

Units to be accounted for: Work in process, May 1 Started into production Total units Units accounted for as follows: Beginning inventory: Materials 200 units × 45% Conversion 200 units × 70% Units started and completed Ending inventory: Materials 400 units × 40% Conversion 400 units × 25% Total equivalent units

200 5,000 5,200 Equivale nt units Materials Conversion 90 4,600

140 4,600

160 4,850

100 4,840

The Production Report - FIFO Method

Step 2: Calculate the equivalent units of material and conversion that were transferred from beginning work in process to the next department. Units to be accounted for: Work in process, May 1 Started into production Total units Units accounted for as follows: Beginning inventory: Materials 200 units × 45% Conversion 200 units × 70% Units started and completed Ending inventory: Materials 400 units × 40% Conversion 400 units × 25% Total equivalent units

200 5,000 5,200 Equivale nt units Materials Conversion 90 4,600

140 4,600

160 4,850

100 4,840

The Production Report - FIFO Method

Step 3: Determine the number of units started and completed during the period.

Units to be accounted for: Work in process, May 1 Started into production Total units Units accounted for as follows: Beginning inventory: Materials 200 units × 45% Conversion 200 units × 70% Units started and completed Ending inventory: Materials 400 units × 40% Conversion 400 units × 25% Total equivalent units

200 5,000 5,200 Equivale nt units Materials Conversion 90 4,600

140 4,600

160 4,850

100 4,840

The Production Report FIFO Step 4: Calculate the equivalent units of material and conversion Methodthat are in ending work in process inventory. Units to be accounted for: Work in process, May 1 Started into production Total units Units accounted for as follows: Beginning inventory: Materials 200 units × 45% Conversion 200 units × 70% Units started and completed Ending inventory: Materials 400 units × 40% Conversion 400 units × 25% Total equivalent units

200 5,000 5,200 Equivale nt units Materials Conversion 90 4,600

140 4,600

160 4,850

100 4,840