Question

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

	Materials		Conversion
Cost of work in process inventory at the beginning of the period	$	3,200	$	630
Equivalent units of production in the ending work in process inventory		420		140
Equivalent units of production required to complete the beginning work      in process inventory		690		1,240
Cost per equivalent unit for the period	$	1.80	$	.70

        

A total of 26,900 units were completed and transferred to the next processing department during the period. Beginning work in process inventory consisted of 1,900 units and ending work in process inventory consisted of 1,000 units.

Required:

Using the FIFO method, compute the cost of the units transferred to the next department during the period and the cost of ending work in process inventory.

Answer 1

Calculation of cost of units transferred to the next department during the period
	Material	Conversion	Total
Cost of beginning work in process inventory	3200	630	3830
Cost of completing beginning work in prcess inventory	1242	868	2110
Cost of remaining uts produced an transferred	45000	17500	62500
Total Cost of units transferred to next department	49442	18998	68440
Cost of completing beginning work in progress	Equivalent uts req to complete *Cost per equivalent unit
	690*1.8 =1242
	1240*0.7 = 868
Number of remaining units produced and transferred	Total uts completed and transferred - Units of beginning wor-in-process inventory
	(26900-1900) = 25000
cost of remaining units produced and transferred for material.	Number of remaining units produced and transferred * Cost per equivalent unit
	25000*1.8 = 45000
	25000*0.7 = 17500

Units of production in the ending work in process inventory	420	140
Cost per equivalent unit for the period	1.8	0.7
Cost of ending work-in-process	756	98