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Exercise 4A-9 Equivalent Units; Equivalent Units of Production; Assigning Costs-FIFO Method [LO4-6, LO4-7, LO4-8] Jarvene Corporation...

Exercise 4A-9 Equivalent Units; Equivalent Units of Production; Assigning Costs-FIFO Method [LO4-6, LO4-7, LO4-8]

Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:

Units in beginning inventory 350
Units started into production 4,250
Units in ending inventory 330
Units transferred to the next department 4,270
Materials Conversion
Percentage completion of beginning inventory 70 % 30 %
Percentage completion of ending inventory 80 % 30 %

The cost of beginning inventory according to the company’s costing system was $7,831 of which $4,849 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $175,274. The costs per equivalent unit for the month were:

Materials Conversion
Cost per equivalent unit $18.00 $23.00

Required:

1. Compute the total cost per equivalent unit for the month.

2. Compute the equivalent units of material and conversion in the ending inventory.

3. Compute the equivalent units of material and conversion that were required to complete the beginning inventory.

4. Compute the number of units started and completed during the month.

5. Compute the cost of ending work in process inventory for materials, conversion, and in total for the month.

6. Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.

Solutions

Expert Solution

  • [1] Total cost per equivalent unit = $ 18 + 23 = $ 41
  • Working

EUP - FIFO Method

Units

% Material

EUP Materials

% Conversion

EUP - Conversion

Units of ENDING WIP

                                      330

80.0%

                         264

30.0%

                                      99

Units STARTED & COMPLETED

                                   3,920

100%

                     3,920

100%

                                3,920

Units of beginning WIP

                                      350

30.00%

                         105

70%

                                   245

Equivalent Units of Production

                     4,289

                                4,264

  • [2] Ending inventory
    Material = 264 units
    Conversion Cost = 99 units
  • [3] Beginning units
    Material = 105 units
    Conversion Cost = 245 units
  • [4] No of units started and completed = 4270 – 350 = 3920 units
  • [5]

Costs of Ending WIP:

EUP

Cost per EUP

Total Cost

- Direct Materials

                                      264

$                            18.00

$            4,752.00

- Conversion

                                         99

$                            23.00

$            2,277.00

Total cost of ending WIP

$                 7,029.00

  • [6]

Cost Transferred out:

EUP

Cost per EUP

Total Cost

Cost of Beginning WIP

               7,831.00

Cost to complete beginning WIP-

- Direct Materials

                                105.00

                               18.00

               1,890.00

- Conversion

                                245.00

                               23.00

               5,635.00

Total cost to complete beginning WIP

             15,356.00

Cost of Units started & completed this period:

EUP

Cost per EUP

Total Cost

- Direct Materials

                             3,920.00

                               18.00

             70,560.00

- Conversion

                             3,920.00

                               23.00

             90,160.00

Total costs started & Completed this period

           160,720.00

Total cost of work finished this period

                176,076.00

ekkarill92 answered 1 year ago
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