Weighted Average Method, FIFO Method, Physical Flow, Equivalent Units Middelton Company manufactures a product that passes through two processes: Fabrication and Assembly. The following information was obtained for the Fabrica Department for October: a. All materials are added at the beginning of the process. b. Beginning work in process had 74,100 units, 20 percent complete with respect to conversion costs. c. Ending work in process had 17,400 units, 40 percent complete with respect to conversion costs. d. Started in process, 109,400 units. Required: 1. Prepare a physical flow schedule. Middelton Company Physical Flow Schedule Units to account for: Units, beginning work in process 74,100 Units started 109,400 Total units to account for 183,500 Units accounted for: Units completed and transferred out: Started and completed 92,000 From beginning work in process 74,100 Units, ending work in process 17,400 Total units accounted for 183,500 2. Compute equivalent units using the weighted average method. Weighted average method: Equivalent Units Direct Materials 183,500 Weighted average method: Equivalent Units Direct Materials Conversion Costs 183,500 3. Compute equivalent units using the FIFO method. FIFO method: Direct Materials Conversion Costs Equivalent Units 109,400 Feedback Check My Work 2. To calculate equivalent units, weighted average counts prior-period output in BWIP as belonging to the current period. So all completed units are treated as output of the current period. 3. FIFO treats the work (equivalent output) in BWIP as belonging to the prior period and only counts the work (equivalent output for each input) done this period as part of this period's output. 4. Suppose that the cost of direct materials in beginning work in process is $564,100 and that the direct materials cost incurred for October is $757,300. With these changes, answer the following: a. What is the unit materials cost for the units in BWIP? Round your answers to the nearest cent. b. What is the unit materials cost for units produced in October? Round your answers to the nearest cent. 7.20 Which method should be used to answer this question? Weighted Average Explain why the unit materials cost is not the same for weighted average and FIFO. 2. To calculate equivalent units, weighted average counts prior-period output in BWIP as belonging to the current period. So all completed units are treated as output of the current period. 3. FIFO treats the work (equivalent output) in BWIP as belonging to the prior period and only counts the work (equivalent output for each input) done this peri as part of this period's output. 4. Suppose that the cost of direct materials in beginning work in process is $564,100 and that the direct materials cost incurred for October is $757,300. With these changes, answer the following: a. What is the unit materials cost for the units in BWIP? Round your answers to the nearest cent. b. What is the unit materials cost for units produced in October? Round your answers to the nearest cent. 7.20 Which method should be used to answer this question? Weighted Average Explain why the unit materials cost is not the same for weighted average and FIFO. Of the two unit calculations, FIFO uses only October costs and October output, so it should When those costs are changing from one period to the next, then the unit costs for FIFO and WA will be used to calculate the unit materials cost for October differ. As part of your explanation, show that the weighted average unit cost for materials is the blend of the September unit materials cost and the October unit materials cost Because the weights are the distribution of total equivalent units for each unit cost. c. Which data analytic types (descriptive, diagnostic, predictive, or prescriptive) apply for 4a and 4b7 Note: More than one data analytic type might apply. (See Exhibit 2.5 and Exhibit 2.6 for a review of data analytic metrics.) Calculating what the unit materials cost is for September is descriptive prescriptive diagnostic Identifying the method that should be used for calculating October's unit materials cost is Explaining why the two unit costs differ and showing how the Weighted Average method is a blend of BWIP and current cost is