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 Units transferred out to Finishing Department in August Work in process, August 1 (85% complete as to conversion costs) Work in process, August 31 (25% complete as to conversion costs) 191,000 206,000 55,000 40,000 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 usi 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?

Exercise 8-30 (Algo) Compute Equivalent Units: Ethical Issues (LO 8-1, 3, 5) 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 avalable 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? 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). c1. 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? Exercise 8-30 (Algo) Compute Equivalent Units: Ethical Issues (LO 8-1, 3, 5) 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 avalable 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? 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). c1. 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