Question
In: Accounting
arvene Corporation uses the FIFO method in its process costing system. The following data are for...
arvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:
| Units in beginning inventory | 430 |
| Units started into production | 4,270 |
| Units in ending inventory | 310 |
| Units transferred to the next department | 4,390 |
| Materials | Conversion | |||
| Percentage completion of beginning inventory | 60 | % | 40 | % |
| Percentage completion of ending inventory | 70 | % | 50 | % |
The cost of beginning inventory according to the company’s costing system was $7,835 of which $4,830 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $178,861. The costs per equivalent unit for the month were:
| Materials | Conversion | |
| Cost per equivalent unit | $18.00 | $23.00 |
Required:
1. Compute the total cost per equivalent unit for the month.
2. Compute the equivalent units of material and conversion in the ending inventory.
3. Compute the equivalent units of material and conversion that were required to complete the beginning inventory.
4. Compute the number of units started and completed during the month.
5. Compute the cost of ending work in process inventory for materials, conversion, and in total for the month.
6. Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.
Solutions
Expert Solution
Solution 1:
total cost per equivalent unit = 18 + 23 = $41.00
Solution 2:
equivalent units of material in ending inventory = 310*70% = 217
equivalent units of Conversion in ending inventory = 310*50% = 155
Solution 3:
equivalent units of material required to complete the beginning inventory = 430*40% = 172
equivalent units of Conversion required to complete the beginning inventory = 430*60% = 258
Solution 4:
number of units started and completed = Units transferred to the next department- Beginning units
= 4390 - 430 = 3960
Solution 5:
| Cost of ending work in process | EUP | Cost per EUP | Total Cost |
| Material | 217 | $18.00 | $3,906 |
| Conversion | 155 | $23.00 | $3,565 |
| Total Ending work in process | $7,471 |
Solution 6:
| Cost of Units Transferred Out | EUP | Cost per EUP | Total Cost |
| Material (3960+172) | 4132 | $18.00 | $74,376 |
| Conversion (3960+258) | 4218 | $23.00 | $97,014 |
| Total Added | $1,71,390 | ||
| Add: beginning | $7,835 | ||
| Cost of Units Transferred Out | $1,79,225 |
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Percentage completion of ending inventory
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