Question

Daosta Inc. uses the FIFO method in its process costing system. The following data concern the op... Daosta Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Work in process, beginning: Units in process 900 Percent complete with respect to materials 40 % Percent complete with respect to conversion 20 % Costs in the beginning inventory: Materials cost $ 530 Conversion cost $ 2108 Units started into production during the month 16,000 Units completed and transferred out 16,000 Costs added to production during the month: Materials cost $ 32,180 Conversion cost $ 416,512 Work in process, ending: Units in process 900 Percent complete with respect to materials 50 % Percent complete with respect to conversion 70 %

Using the FIFO method:

Equivalent Units of production for direct materials:

Equivalent units of production for conversion costs:

Cost per equivalent unit- direct materials:$

cost per equivalent unit- conversion costs:$

Total value of ending Work in process:$

Total value of units transferred out:$

Answer 1

Solution:

Daosta Inc.
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	900
Units started this period	16000
Total unit to be accounted for	16900
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 60% Conversion - 80%	900	540	720
Started and completed currently	15100	15100	15100
Transferred to finished goods	16000	15640	15820
Units in ending WIP Material - 50% Conversion - 70%	900	450	630
Total units accounted for	16900	16090	16450

Daosta Inc.
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$448,692.00	$32,180.00	$416,512.00
Equivalent units		16090	16450
Cost per equivalent unit		$2.00	$25.32

Daosta Inc.
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$2,638	$530	$2,108
Current cost added to complete beginning WIP:
Material (540*$2)	$1,080	$1,080
Conversion (720 * $25.32)	$18,230		$18,230
Total Cost from beginning inventory	$21,948	$1,610	$20,338
Current cost of unit started and completed:
Material (15100*$2)	$30,200	$30,200
Conversion (15100*$25.32)	$382,330		$382,330
Total cost of unit started and completed	$412,530	$30,200	$382,330
Total cost of unit transferred out	$434,478	$31,810	$402,668
Cost assigned to ending WIP:
Material (450*$2)	$900	$900
Conversion (630*$25.32)	$15,952		$15,952
Total ending WIP inventory	$16,852	$900	$15,952
Total cost accounted for	$451,330	$32,710	$418,620