Question

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day: Beginning WIP inventory Direct materials $ 976 Conversion costs 272 Current period costs Direct materials 11,440 Conversion costs 6,644 Quantity information is obtained from the manufacturing records and includes the following: Beginning inventory 600 units (60% complete as to materials, 53% complete as to conversion) Current period units started 4,000 units Ending inventory 1,200 units (40% complete as to materials, 20% complete as to conversion) 6.value: 1.50 pointsRequired information Required: (1) Compute the equivalent units for the materials and conversion cost calculations. (2) Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method. (Round your answers to 2 decimal places.) ReferenceseBook & Resources WorksheetDifficulty: 2 MediumLearning Objective: 08-05 Assign costs to products using first-in, first-out (FIFO) costing. Check my work 7.value: 1.50 pointsRequired information Compute the cost of goods transferred out and the ending inventory using the FIFO method. (Do not round intermediate calculations.)

Answer 1

(1) Compute the equivalent units for the materials and conversion cost calculations.

	Physical units	%	material	%	conversion cost
Beginning work in process	600	40%	240	47%	282
Units started & completed	2800	100%	2800	100%	2800
Ending work in process	1200	40%	480	20%	240
Total equivalent unit			3520		3322

(2) Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method.

	Material	Conversion cost
Cost added during period	11440	6644
Equivalent unit	3520	3322
Cost per equivalent unit	3.25	2.00

Assign costs to products using first-in, first-out (FIFO) costing.

Units transfered out
Beginning work in process
Direct material (976+240*3.25)	1756
Conversion cost (272+282*2)	836	2592
Units started and completed (3.25+2)*2800		14700
Total of goods transferred out		17292
Cost of ending work in process
Direct material (480*3.25)	1560
Conversion cost (240*2)	480	2040
Total cost of ending work in process		2040