Question

Betty DeRose, Inc. operates two departments, the handling department and
the packaging department. During April, the handling department reported
the following information:

                                           % complete      % complete
                                units         DM           conversion 
work in process, April 1        18,000        38%             71%
units started during April      80,000
work in process, April 30       44,000        82%             47%

The cost of beginning work in process and the costs added during April
were as follows:

                                 DM         Conversion       Total cost
work in process, April 1      $ 51,764       $152,477         $204,241
costs added during April       191,452        232,125          423,577
total costs                    243,216        384,602          627,818

Calculate the total cost of the handling department's work in process
inventory at April 30 using the FIFO process costing method.

Answer 1

• All working forms part of the answer
• Requirement: Ending WIP Inventory Cost
• Answer

Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	36,080	$                   2.30	$          82,984.00
- Conversion	20,680	$                   3.75	$          77,550.00
Total cost of ending WIP				$      160,534.00 = Answer

• Workings

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	44,000	82%	36,080	47%	20,680
Units STARTED & COMPLETED	36,000	100%	36,000	100%	36,000
Units of beginning WIP	18,000	62%	11,160	29%	5,220
Equivalent Units of Production			83,240		61,900
COST per EUP			Material		Conversion
Cost incurred this period			$       191,452.00		$                  232,125.00
Total Costs		Costs	$       191,452.00	Costs	$                  232,125.00
Equivalent units of production		EUP	83,240	EUP	61,900
Cost per EUP			$             2.30		$                        3.75