Question

Lansing, Inc. provides the following information for one of its department’s operations for June (no new material is added in Department T):

WIP inventory—Department T
Beginning inventory (8,500 units, 30% complete with respect to Department T costs)
Transferred-in costs (from Department S)	$	39,700
Department T conversion costs		15,190
Current work (19,500 units started)
Prior department costs		97,500
Department T costs		168,350

The ending inventory has 3,500 units, which are 60 percent complete with respect to Department T costs and 100 percent complete for prior department costs.

Required:

Complete the production cost report using FIFO. (Round "Cost per equivalent unit" to 2 decimal places.)

Answer 1

Cost report is the step 4

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period
		Department S	Department T	Department S	Department T
Beginning WIP	8,500	100%	30%	0%	70%
Units introduced	19,500
Total units to be accounted for	28,000
Completed and Transferred unit	24,500	0%	0%	100%	100%
Ending WIP	3,500	0%	0%	100%	60%

STEP 2
Equivalent Units
	Total Units	Department S		Department T
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	8,500	0%	-	70%	5,950
From units started/Introduced	16,000	100%	16,000	100%	16,000
Total	24,500		16,000		21,950
	Total Units	Department S		Department T
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	3,500	100%	3,500	60%	2,100
Total EUP	28,000		19,500		24,050

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Department S		Department T		TOTAL
Cost incurred in Current Period	$                            97,500.00		$                         1,68,350.00		$          2,65,850.00
Total Equivalent Units	$                            19,500.00		$                            24,050.00
Cost per Equivalent Units	$                                       5.00		$                                       7.00
Cost of Beginning WIP	$                            39,700.00		$                            15,190.00		$             54,890.00
Total cost to be accounted for					$          3,20,740.00

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		24,500.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Department S	-	$        5.00	$                     -
	Department T	5,950	$        7.00	$      41,650.00	$             41,650.00
B	From units started & completed
	Department S	16,000	$        5.00	$      80,000.00
	Department T	16,000	$        7.00	$ 1,12,000.00	$          1,92,000.00
C=A+B	Total				$          2,33,650.00
D	Cost of Beginning WIP				$             54,890.00
E=C+D	Total Cost of Units transferred				$          2,88,540.00
	Cost of	Ending WIP		3,500.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Department S	3,500	$        5.00	$      17,500.00
G	Department T	2,100	$        7.00	$      14,700.00
H = F + G	Total Cost of Ending WIP				$             32,200.00
I = E + H	Total Cost accounted for				$          3,20,740.00
J	Rounding Off Differences				$                             -
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]				$          3,20,740.00