Joined: 24 Nov 2008
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Posted: 18 Nov 2009 at 11:26 | IP Logged
kj_nyc wrote:
The reason you don't multiply EI by 80% or BI by 60% in this problem is because the problem says direct materials are added when the process is 70% complete. So if process is less than 70% complete, there is 0% DM, and if the process is more than 70% complete, it's 100% DM.
So instead of 170,000 + 20000 (25,000 x.8) - 12000(20,000 X .6) you do 170,000 + 25000 (25,000 x1) - 0 (20,000 X 0)
Joined: 05 Jun 2009 Location: United States
Online Status: Offline Posts: 1145
Posted: 18 Nov 2009 at 12:06 | IP Logged
If the problem mentions separate inventory components (e.g., DM, DL, conversion costs), the problem will have to tell you EU with respect to what inventory component. The only time when you will get a problem asking only for EU is if the problem gives you only one inventory component.
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Topic: FIFO EUP - Yaegar
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