Question

In: Accounting

A department uses the FIFO method of process costing. All direct materials are added at the...

  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)?

Solutions

Expert Solution

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

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