Question

Use below information for Questions 10 to 13:

The smelting department of Company X has following production and cost data for September:

• Production: Beginning work in process 200 units that are 100% complete as to materials and 71% complete as to conversion costs; units started into production 1,000 units; ending work in process 250 in units that are 100% complete as to materials and 57% complete to conversion costs.
• Manufacturing costs: Beginning work in process TL8,100 materials, TL9,270 labor and TL2,500 manufacturing costs. In current period, TL50,500 worth of materials, TL25,100 worth of labor and TL31,000 worth of manufacturing overhead costs are incurred.

Q-10) Compute the material cost portion of the transferred out inventory if the company uses WA method to compute equivalent units.

Q-11) Compute the conversion cost portion of the transferred out inventory if the company uses FIFO method to compute equivalent units. met hod to compute fquivalent units.

Q-12) Compute the material cost portion of the ending inventory if the company uses FIFO method to compute equivalent units.

Q-13) Compute the conversion cost portion of the ending inventory if the company uses WA method to compute equivalent

Answer 1

Summery
		Closing Stock
Question	Method	Material	Conversion cost
10	WA Method	$         12,208	$                         -
11	FIFO	$                  -	$                  8,411
12	FIFO	$         12,625	$                         -
13	WA Method	$                  -	$                  8,853

Production Cost Report-FIFO
a) Equivalent units of Production- FIFO
	Material	Conversion Cost
Units in beginning WIP (A)	200	200
% of completion of beginning WIP in previous period (B)	100%	71%
% of beginning WIP completed this period [C=100%-B]	0%	29%
Equivalent units in beginning WIP [D=A×C]	-	58
Units both started and completed in current period (E)	750	750
Units of ending WIP (F)	250	250
Percentage of completion of ending WIP (G)	100%	57%
Equivalent units in ending WIP (H=F×G)	250	142.5
Total equivalent units (D+E+H)	1,000	950.5
b) Cost per Equivalent Unit of Production-FIFO
	Material	Conversion Cost	Total
Cost to be accounted for (a)	$         50,500.00	$             56,100.00	$        106,600.00
Total Equivalent unit to be accounted for (b)	1,000	950.5
Cost per Equivalent Unit (a/b)	50.50	59.02	109.52
c) & d)Assignment of Cost to the Units transferred out & Units in ending WIP-FIFO
	Material	Conversion Cost	Total
Cost in beginning WIP inventory (A)	$                 8,100	$                   11,770	$                 19,870
Transferred in cost for opening WIP (B)= {Cost per Equivalent unit* Equivalent unit}	$                        -	$                     3,423	$                   3,423
		(58*59.0216)
Beginning Inventory ©=A+B	$                 8,100	$                   15,193	$                 23,293
Cost assigned to the units transferred out (D)= {Cost per Equivalent unit* Equivalent unit}	$               37,875	$                   44,266	$                 82,141
	(750*50.50)	(750*59.0216)
Cost assigned to the ending WIP inventory (E)= {Cost per Equivalent unit* Equivalent unit}	$               12,625	$                     8,411	$                 21,036
	(250*50.50)	(142.5*59.0216)
Total Cost accounted for			$        126,470.00

a) Equivalent units calculations- Weighted Avg Method
	Material	Conversion Cost
Transferred out (A)	950.00	950.00
Units of ending WIP (B)	250.00	250.00
Percentage of completion of ending WIP (C)	100%	57%
Equivalent units in ending WIP (D=B×C)	250.00	142.50
Total equivalent units (A+D)	1,200.00	1,092.50
b) Calculation of Cost per Equivalent Unit
	Material	Conversion Cost	Total
Cost in beginning WIP inventory (A)	$      8,100.00	$            11,770.00	$           19,870.00
Cost added during the period (B)	$    50,500.00	$            56,100.00	$        106,600.00
Cost to be accounted for(C=A+B)	$    58,600.00	$            67,870.00	$        126,470.00
Total Equivalent unit to be accounted for (D)	1,200.00	1,092.50
Cost per Equivalent Unit (E=C/D)	48.83	62.12	110.96
c) & d) Assignment of Cost to the Units transferred out & Units in ending WIP
	Material	Conversion Cost	Total
Cost assigned to the units transferred out (D)= {Cost per Equivalent unit* Equivalent unit}	$          46,392	$                  59,017	$              105,409
	(950*48.83)	(950*62.12)
Cost assigned to the ending WIP inventory (E)= {Cost per Equivalent unit* Equivalent unit}	$          12,208	$                     8,853	$                 21,061
	(250*48.83)	(142.50*62.12)
Total Cost accounted for			$        126,470.00