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        17,000        46%             77%
units completed during April    46,000
work in process, April 30       23,000        29%             14%

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      $121,279       $203,056         $324,335
costs added during April       363,285        227,619          590,904
total costs                    484,564        430,675          915,239

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

Answer 1

Cost of ending inventory = $74,313

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	17,000	46%	77%	54%	23%
Units introduced	52,000
Total units to be accounted for	69,000
Completed and Transferred unit	46,000	0%	0%	100%	100%
Ending WIP	23,000	0%	0%	29%	14%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	17,000	54%	9,180	23%	3,910
From units started/Introduced	29,000	100%	29,000	100%	29,000
Total	46,000		38,180		32,910
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	23,000	29%	6,670	14%	3,220
Total EUP	69,000		44,850		36,130

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion cost		TOTAL
Cost incurred in Current Period	$ 363,285		$ 227,619		$ 590,904
Total Equivalent Units	44,850		36,130
Cost per Equivalent Units	$ 8.10		$ 6.30		$ 14.40
Cost of Beginning WIP					$ 324,335
Total cost to be accounted for					$ 915,239

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		46,000.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	9,180	$ 8.10	$ 74,358
	Conversion cost	3,910	$ 6.30	$ 24,633	$ 98,991
B	From units started & completed
	Material	29,000	$ 8.10	$ 234,900
	Conversion cost	29,000	$ 6.30	$ 182,700	$ 417,600
C=A+B	Total				$ 516,591
D	Cost of Beginning WIP				$ 324,335
E=C+D	Total Cost of Units transferred				$ 840,926
	Cost of	Ending WIP		23,000.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Material	6,670	$ 8.10	$ 54,027
G	Conversion cost	3,220	$ 6.30	$ 20,286
H = F + G	Total Cost of Ending WIP				$ 74,313
I = E + H	Total Cost accounted for				$ 915,239
J	Rounding Off Differences				$ 0
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]				$ 915,239