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Basic FLows, Equivalent Units

Thayn Company produces an arthritis medication that passes through two departments: Mixing and Tableting. Thayn uses the weighted average method. Data for February for Mixing is as follows: BWIP was zero; EWIP had 36,000 units, 50% complete; and 420,000 units were started. Tabletingâs data for February is as follows: BWIP was 24,000 units, 20% complete; and 12,000 units were in EWIP, 40% complete.

Required:

1. For Mixing, calculate the (a) number of units transferred to Tableting, and (b) equivalent units of production.

2. For Tableting, calculate the number of units transferred out to Finished Goods.

3. CONCEPTUAL CONNECTION Suppose that the units in the mixing department are measured in ounces, while the units in Tableting are measured in bottles of 100 tablets, with a total weight of eight ounces (excluding the bottle). Decide how you would treat units that are measured differently, and then repeat Requirement 2 using this approach.

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Answer:

1.(a) Number of units transferred to Tableting, 384,000 ounces

(b) Equivalent units of production. Materials 420,000 , Conversion 402,000

2. For Tableting, the number of units transferred out to Finished Goods. 396,000 ounces

3. Units Transferred to Finished Goods 396000 ounces  = 49500 bottles or 4,950,000 tablets.

Explanation:

Thayn Company

Weighted Average Method

Mixing

First we calculate the number of units transferred out.

BWIP           zero;

Units Started 420,000

Total Units   420,000

The total units remain the same . They are obtained either by adding BWIP and units started  or by adding EWIP or units transferred.

EWIP  36,000 units,

Units Transferred 384,000

Total Units            420,000

Equivalent Units

Particulars       Units        % of Completion          Equivalent Units

                                              Mat. Conversion       Materials Conversion

Units Transferred  384,000      100        100         384,000    384,000

EWIP                   36,000            100         50           36000      18000

Equivalent Units                                                      420,000     402,000

Tableting

The total units remain the same . They are obtained either by adding BWIP and units started  or by adding EWIP or units transferred.

BWIP  24,000 units

Units Received 384,000

Total Units      408,000

EWIP    12000 units

Transferred To FG    396,000

Total Units                  408,000

3. CONCEPTUAL CONNECTION

Given

8 ounces = 100 Tablets contained in  1 bottle

408000 ounces = 408000/8  =  51000  bottles of 100 tablets each.

Total Tablets = 51000*100= 5100,000 tablets

Units Transferred to Finished Goods 396000 ounces  which is equal to 396000/8=  49500 bottles or 4,950,000 tablets.

Number of units transfer is 434,000 units

Work in progress and Ending product:

Computation:

1) a) Number of units transfer = Opining units - Ending work in progress

Number of units transfer = 470,000 - 36,000

Number of units transfer = 434,000 units

b) Equivalent units = Units completed and transferred + 50% of Ending work in progress

Equivalent units = 434,000 + 50% of 36,000

Equivalent units = 434,000 + 18,000

Equivalent units = 452,000 units

2) Number unit transferred out to finished goods = Beginning work in progress + units transferred from Mixing department - Ending work in progress

Number unit transferred out to finished goods = 34,000 + 434,000 - 12,000

Number unit transferred out to finished goods = 456,000 units.

3) Number of bottles' = 456,000 / 100

Number of bottles' = 4560 bottles

Weight transferred = 4560 × 8

Weight transferred = 36480 ounce

Units transferred = 4560 units

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