Question

THE Company operates a single processing department and
uses a FIFO process costing system. The equivalent units
for August were calculated as 88,620 for direct materials
and 73,910 for conversion. THE Company's work in process
at August 1 was:

                                    % complete    % complete
                           units       DM         conversion 
work in process, Aug. 1    36,000      55%           26%

The cost of beginning work in process and the costs added
during August were as follows:

                                 DM           Conversion
work in process, Aug. 1       $ 44,310         $ 36,955
costs incurred during Aug.    $372,204         $243,903

Calculate the total cost of the 36,000 units in the beginning
work in process.

Answer 1

· Working

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of beginning WIP	36,000	45.00% [100 – 55%]	16,200	74% [100 – 26%]	26,640

COST per EUP			Material		Conversion
Cost incurred this period			$       372,204.00		$                  243,903.00
Total Costs		Costs	$       372,204.00	Costs	$                  243,903.00
Equivalent units of production		EUP	88,620	EUP	73,910
Cost per EUP			$                4.2000		$                          3.3000

· Answer calculation

Total cost of 36000 units in Beginning inventory
= ($44310 + 36955) + (16200 units x $ 4.20) + (26640 units x $ 3.30)
= 81265 + 68040 + 87912
= $ 237,217 [Answer]