Question

COST ACC 1:

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)

QUESTION 1:

Required 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.)

QUESTION 2:

Required information

Compute the cost of goods transferred out and the ending inventory using the FIFO method. (Do not round intermediate calculations.)

Answer 1

• All working forms part of the answer
• Requirement 1

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	1,200	40%	480	20%	240
Units STARTED & COMPLETED	2,800	100%	2,800	100%	2,800
Units of beginning WIP	600	40%	240	47%	282
Equivalent Units of Production			3,520		3,322

• Requirement 2

COST per EUP			Material		Conversion
Cost incurred this period			$          11,440.00		$                      6,644.00
Total Costs		Costs	$          11,440.00	Costs	$                      6,644.00
Equivalent units of production		EUP	3,520	EUP	3,322
Cost per EUP			$             3.25		$                        2.00

• Question 2

--Cost of Goods transferred = 4 17,292 = Answer #1

Working

Cost Transferred out:	EUP	Cost per EUP	Total Cost
Cost of Beginning WIP			$            1,248.00
Cost to complete beginning WIP-
- Direct Materials	240	$                   3.25	$                780.00
- Conversion	282	$                   2.00	$                564.00
Total cost to complete beginning WIP			$            2,592.00
Cost of Units started & completed this period:	EUP	Cost per EUP	Total Cost
- Direct Materials	2,800	$                   3.25	$            9,100.00
- Conversion	2,800	$                   2.00	$            5,600.00
Total costs started & Completed this period			$          14,700.00
Total cost of work finished this period				$         17,292.00

--Cost of Ending WIP Inventory = $ 2,040

Working

Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	480	$                   3.25	$            1,560.00
- Conversion	240	$                   2.00	$                480.00
Total cost of ending WIP				$           2,040.00