Question

Pacific Ink had beginning work-in-process inventory of $802,560 on October 1. Of this amount, $335,200 was the cost of direct materials and $467,360 was the cost of conversion.The 59,000 units in the beginning inventory were 25 percent complete with respect to both direct materials and conversion costs.

During October, 124,000 units were transferred out and 41,000 remained in ending inventory.The units in ending inventory were 75 percent complete with respect to direct materials and 35 percent complete with respect to conversion costs. Costs incurred during the period amounted to $3,094,000 for direct materials and $3,893,400 for conversion.

a-1. Compute the cost of goods transferred out and the cost of ending inventory using the FIFO method. (Round intermediate calculations to 2 decimal places.)
COST OF GOODS TRANSFERRED OUT ????????
COST OF ENDING INVENTORY ????????????

Answer 1

a-1
COST OF GOODS TRANSFERRED OUT = $6658360
COST OF ENDING INVENTORY = $1131600
Workings:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, October 1	59000	44250	44250
Started and completed in October	65000	65000	65000
Transferred to Packing Department in October	124000	109250	109250
Inventory in process, October 31	41000	30750	14350
Total units to be assigned costs	165000	140000	123600
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for October		3094000	3893400
Total equivalent units		140000	123600
Cost per equivalent unit		22.10	31.50
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, October 1			802560
Costs incurred in October			6987400
Total costs accounted for			7789960
Cost allocated to completed and partially completed units:
Inventory in process, October 1 balance			802560
To complete inventory in process, October 1	977925	1393875	2371800
Cost of completed October 1 work in process			3174360
Started and completed in October	1436500	2047500	3484000
Transferred to finished goods in October			6658360
Inventory in process, October 31	679575	452025	1131600
Total costs assigned			7789960