Hoyt, Incorporated has a process costing system at its Forest Street Plant. All materials are introduced when conversion costs reach 40 percent. The following information is available for physical units during August:

Units started in August185,000Units transferred out to Finishing Department in August200,000Work in process, August 1 (85% complete as to conversion costs)52,000Work in process, August 31 (25% complete as to conversion costs)37,000

Required:

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

Materials equivalent Units are ________

Conversion costs equivalent Units are _______

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

Materials equivalent Units are ________

Conversion costs equivalent Units are _______

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 45 percent (from 25 percent).

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

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?

Yes or No

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

Yes or No