Aaron Company has a process costing system. All materials are introduced when conversion costs reach 50 percent. The following information is available for physical units during March.

Work in process, March 1 (60% complete as to conversion costs)	154,000
Units started in March	608,000
Units transferred to Finishing Department in March	638,000
Work in process, March 31, (40% completed as to conversion costs)	124,000

a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method.

	Equivalent Units
Materials
Conversion costs

b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method.

	Equivalent Units
Materials
Conversion costs

c. The company president has been under considerable pressure to increase income. He tells the controller to change the estimated completion for ending work in process to 60 percent (from 40 percent).

c-1. What effect will this change have on the unit costs of units transferred to finished goods in March?

Answers available: The change will reduce the unit cost for the units transferred to finished goods. OR The change will increase the unit cost for the units transferred to finished goods.

c-2. Would this be ethical?

Answers available: Yes OR No

c-3. Is this likely to be a successful strategy for affecting income over a long period of time?

Answers available: Yes OR No