Question

1. A department uses the FIFO method of process costing. All direct materials are added at the beginning of the process. This department has the following data for this month.

   • 182 units in beginning WIP (53% complete with respect to conversion costs).
   • 11,540 units started
   • 184 units in ending WIP (55% complete with respect to conversion costs).
   • $15 direct material cost per equivalent unit
   • $17 conversion cost per equivalent unit
   • $4,432 beginning WIP direct materials costs
   • $3,638 beginning WIP conversion costs

   What is the department's total cost of units completed and transferred out (round final answer to nearest cent if necessary)?

Answer 1

Solution

	Total
Units Completed	$      372,916.18
Ending Inventory	$          4,480.40

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	182	100%	53%	0%	47%
Units introduced	11,540
Total units to be accounted for	11,722
Completed and Transferred unit	11,538	0%	0%	100%	100%
Ending WIP	184	0%	0%	100%	55%

0

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	182	0%	-	47%	86
From units started/Introduced	11,356	100%	11,356	100%	11,356
Total	11,538		11,356		11,442
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	184	100%	184	55%	101
Total EUP	11,722		11,540		11,543

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion cost		TOTAL
Cost incurred in Current Period	$ 173,100		$ 196,227		$ 369,327
Total Equivalent Units	11,540		11,543
Cost per Equivalent Units	$ 15.00		$ 17.00		$ 32.00
Cost of Beginning WIP	$ 4,432		$ 3,638		$ 8,070
Total cost to be accounted for					$ 377,397

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		11,538.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	-	$ 15.00	$ 0
	Conversion cost	86	$ 17.00	$ 1,454	$ 1,454
B	From units started & completed
	Material	11,356	$ 15.00	$ 170,340
	Conversion cost	11,356	$ 17.00	$ 193,052	$ 363,392
C=A+B	Total				$ 364,846
D	Cost of Beginning WIP				$ 8,070
E=C+D	Total Cost of Units transferred				$ 372,916
	Cost of	Ending WIP		184.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Material	184	$ 15.00	$ 2,760
G	Conversion cost	101	$ 17.00	$ 1,720
H = F + G	Total Cost of Ending WIP				$ 4,480
I = E + H	Total Cost accounted for				$ 377,397
J	Rounding Off Differences				$ 0
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]				$ 377,397