Question

Problem 20-7AA FIFO: Process cost summary, equivalent units, cost estimates LO C2, C3, C4, P4

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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 25,800 units to the blending department. Of the units completed, 4,800 were from beginning inventory and the remaining 21,000 were started and completed during the month. Beginning work in process was 100% complete with respect to direct materials and 40% complete with respect to conversion. The company has 4,200 units (100% complete with respect to direct materials and 80% 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	$	11,700		$	114,210
Added during the month		335,160			1,397,412

Problem 20-7A 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.)

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.)

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				4,800
Add: Units Started in Process				25,200
Total Units to account for:				30,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				4800
Units started and completed				21,000
Ending Work in Process				4,200
Total Units to be accounted for:				30,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	60%	2,880
Units started and completed			100%	21,000	100%	21,000
Ending Work in Process			100%	4,200	80%	3,360
Total Equivalent units				25,200		27,240
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			335,160		1,397,412
Equivalent Units			25,200		27,240
Cost per Equivalent unit			13.3		51.3
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (4800 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					125910
Material			0	13.3	0
Conversion Cost			2,880	51.3	147744
Cost of units completed from Beg WIP					273654
Units started and Transferred out (21000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			21,000	13.3	279300
Conversion Cost			21,000	51.3	1077300
Total Cost of Units completed and transferred out:					1356600
Ending Work in process (4200 units)
			Equivalent unit	Cost per EU	Total Cost
Material			4,200	13.3	55860
Conversison Cost			3,360	51.3	172368
Total cost of Ending Work in process:					228,228
Total cost of goods completed = 273654+1356600 =1630254
Journal entry:
Work in process-Blending Dr.			1630254
Work in process-Roasting				1630254