Page 218 - F2 - MA Integrated Workbook STUDENT 2018-19
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Chapter 9
Step 2 – calculate the EUs for each element of cost
Equivalent units
Physical units Direct materials Conversion costs
Finished output
Opening WIP 15,000 0% 0 60% 9,000
Completed units 23,000 100% 23,000 100% 23,000
Closing WIP 7,000 100% 7,000 80% 5,600
Total EU 30,000 37,600
Step 3 – calculate the total cost for each element of cost
Direct Materials Conversion costs
$ $
Current period only 154,200 146,640
Step 4 – calculate the cost per EU
Direct materials = $154,200 ÷ 30,000 EU = $5.14 per EU
Conversion costs = $146,640 ÷ 37,600 EU = $3.90 per EU
Step 5 – value the completed units and closing WIP
The cost of finished output can be calculated as follows:
$
Completed units
Opening WIP
Value b/fwd 100,300
Cost to complete = 9,000 EU × $3.90 35,100
Units started and completed = 23,000 EU × $9.04 207,920
343,320
Closing WIP = 7,000 EU × $5.14 + 5,600 EU × $3.90 57,820
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