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 August $193,000$

Units transferred out to Finishing Department in August $208,000$

Work in process, August $1(85\%$ complete as to conversion costs$)56,000$

Work in process, August $31(25\%$ complete as to conversion costs$)41,000$

Required:

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

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

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?

c$-2.$ Would this be ethical?

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

Required:

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

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

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?

c$-2.$ Would this be ethical?

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