Data concerning a recent period’s activity in the Assembly Department, the first processing department in a...

Data concerning a recent period’s activity in the Assembly Department, the first processing department in a company that uses the FIFO method in its process costing, appear below:

	Materials		Conversion
Cost of work in process inventory at the beginning of the period	$	3,900	$	730
Equivalent units in the ending work in process inventory		470		230
Equivalent units required to complete the beginning work in process inventory		660		1,240
Cost per equivalent unit for the period	$	2.30	$	0.60

A total of 26,500 units were completed and transferred to the next processing department during the period. Beginning work in process inventory consisted of 1,200 units and ending work in process inventory consisted of 2,700 units.

Required:

1. Compute the Assembly Department's cost of ending work in process inventory for materials, conversion, and in total for the period.

2. Compute the Assembly Department's cost of units transferred out to the next department for materials, conversion, and in total for the period.

Solutions

Expert Solution

	Materials	Conversion	Total
Equivalent units Ending work in process (a)	470.00	230.00
cost per unit (b)	2.30	0.60
Cost of ending work in process (a*b)	1081.00	138.00	1219.00


	Materials	Conversion	Total
Cost of beginning work in process	3900.00	730.00	4,630.00
Add: Cost of units to complete beginning work in Process inventory (Equivalent units required to complete the beginning work in process inventory* Cost per equivalent unit for the period) =	=660*2.3 =1518.00	= 1240*0.60=744.00	2,262.00
Add: Cost of units started and completed during the period (units were completed and transferred - beginning work in process inventory) * Cost per equivalent unit for the period	= (26500-1200) * 2.30	= (26500-1200) *0.6
	= 25300*2.30 = 58190	= 25300*0.60 =15180.00	73,370.00
Cost of units transferred to the next department	63608.00	16654.00	80,262.00

ekkarill92 answered 1 year ago

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