Question

Problem 16-7AA FIFO: Process cost summary, equivalent units, cost estimates LO C2, C3, C4, P4

[The following information applies to the questions displayed below.]

Dengo Co. makes a trail mix in two departments: roasting and blending. Direct materials are added at the beginning of each process, and conversion costs are added evenly throughout each process. The company uses the FIFO method of process costing. During October, the roasting department completed and transferred 26,000 units to the blending department. Of the units completed, 4,900 were from beginning inventory and the remaining 21,100 were started and completed during the month. Beginning work in process was 100% complete with respect to direct materials and 30% complete with respect to conversion. The company has 4,300 units (100% complete with respect to direct materials and 70% complete with respect to conversion) in process at month-end. Information on the roasting department’s costs of beginning work in process inventory and costs added during the month follows.

Cost	Direct Materials			Conversion
Of beginning work in process inventory	$	11,800		$	114,390
Added during the month		340,360			1,487,160

Problem 16-7A Part 1

Required:
1. Prepare the roasting department's process cost summary for October using the FIFO method. (Round "Cost per EUP" to 2 decimal places.)

Total costs to account for: Total costs to account for: Unit reconciliation: Units to account for: Total units to account for Total units accounted for: Total units accounted for Equivalent units of production (EUP)- FIFO method Units % Materials EUP- Materials % Conversion EUP- Conversion Total units Cost per equivalent unit of production Materials Conversion Total costs Costs Costs ÷ Equivalent units of production EUP EUP Cost per equivalent unit of production (rounded to 2 decimals) Total costs accounted for: Beginning Inventory Cost: Cost to complete beginning inventory EUP Cost per EUP Total cost Direct materials Conversion Total cost to complete beginning inventory Total cost of units in beginning inventory Cost of units started and completed EUP Cost per EUP Total cost Direct materials Conversion Total cost of units started and completed Total cost of units transferred out Costs of ending work in process EUP Cost per EUP Total cost Direct materials Conversion Total cost of ending work in process Total costs accounted for

Problem 16-7A Part 2

2. Prepare the journal entry dated October 31 to transfer the cost of completed units to the blending department. (Do not round your intermediate calculations.)

• Record the transfer of goods from Roasting to Blending.

Answer 1

Solution 1:

FIFO
Cost Charged to production
Total Cost of Beginning Work in process	$1,26,190
Total Costs incurred this period	$18,27,520
Total Cost to account for	$19,53,710
Total Cost Accounted for	$19,53,710
*Difference due to rounding cost/unit	$0
Unit Reconciliation
Units to account for:
Units in Beginning work in process	4900
Units Started this period	25400
Total Units to account for	30300
Total units Accounted for:
Units in Beginning work in process completed	4900
Units Started and Completed	21100
Units in ending work in process	4300
Total Units accounted for	30300
Equivalent units of production (EUP) - FIFO method
	Units	%Material	EUP-Material	% Conversion	EUP- Conversion
Beginning units completed this period (A)	4900	0%	0	70%	3430
Units Started and Completed (450000-100000) (B)	21100	100%	21100	100%	21100
units of Ending work in process (D)	4300	100%	4300	70%	3010
Equivalent units of production (C+D)			25400		27540
Cost per EUP			Material		Conversion
Costs incurred this period (Total Costs)		Costs	$3,40,360	Costs	$14,87,160
/Equivalent units of Production		EUP	25400	EUP	27540
Cost per Equivalent unit of Production			$13.40		$54.00
Cost Assignment and Reconciliation
Beginning Inventory Cost:
Cost to Complete Beginning Inventory	EUP	Cost per EUP	Total Cost
Direct materials	0	$13.40	$0
Conversion	3430	$54.00	$1,85,220
Total Cost to complete Beginning Inventory			$1,85,220
Total Costs of units in Beginning Inventory ($311410 + $126190)			$3,11,410
Cost of units started and completed	EUP	Cost per EUP	Total Cost
Direct Material	21100	$13.40	$2,82,740
Conversion	21100	$54.00	$11,39,400
Total Cost of units started and completed			$14,22,140
Total cost of units transferred out				$17,33,550
Cost of ending work in process	EUP	Cost per EUP	Total Cost
Direct Material	4300	$13.40	$57,620
Conversion	3010	$54.00	$1,62,540
Total Ending work in process				$2,20,160
Total Costs accounted for				$19,53,710

Solution 2:

Journal Entry to transfer cost of completed units
31-Oct	Work in Process- Blending Dr	$17,33,550
	To Work in Process -Roasting		$17,33,550