Question

Yarmouth Company produces a liquid solvent in two departments: Mixing and Finishing. Accounting records at Yarmouth show the following information for Finishing operations for February (no new material is added in the Finishing Department):

WIP inventory—Finishing
Beginning inventory (10,100 units, 25% complete with respect to Finishing costs)
Transferred-in costs (from Mixing)	$	111,550
Finishing conversion costs		5,472
Current work (98,200 units started)
Mixing costs		873,980
Finishing costs		420,567

The ending inventory has 14,100 units, which are 60 percent complete with respect to Finishing Department costs and 100 percent complete for Mixing Department costs.

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

Answer 1

Equivalent Units :-

Particulars	Physical Units	Mixing Department	Finishing Department
Units to be accounted for
Beginning WIP Inventory	10100
Units Started in Current Period	98200
Total Units to account for	108300
Units accounted for
Units Completed and Transferred Out (108300-14100)	94200	94200	94200
Ending Inventory Units	14100
Mixing Dept.		14100
Finishing Dept. (14100*60%)			8460
Total Units Accounted for	108300	108300	102660

Cost Per Equivalent Unit :-

Mixing Dept. = (Beginning WIP Inventory + Current Period Costs)/ Equivalent Units

= ($111550 + $873980) / 108300

= $985530 / 108300

= $9.1 per equivalent unit

Finishing Dept. = (Beginning WIP Inventory + Current Period Costs)/ Equivalent Units

= ($5472 + $420567) / 102660

= $426039 / 102660

= $4.15 per equivalent unit

Production Cost Report :-

Particulars	Total($)	Mixing($)	Finishing($)
Costs Accounted for :-
Costs assigned to units transferred out :-
Costs from Beginning WIP Inventory	117022	111550	5472
Current Costs added to complete beginning WIP inventory:-	31436
Mixing
Finishing (10100*75%*$4.15)			31436
Current Costs of Unit Started and completed:-	1248150
Mixing (94200*$9.1)		857220
Finishing (94200*$4.15)			390930
Total Costs to be Accounted for	1396608	968770	427838
Cost of Ending Inventory :-	163419
Mixing (14100*$9.1)		128310
Finishing (8460*$4.15)			35109
Total Costs to be Accounted for	1560027	1097080	462947