Question

THE Company operates two departments, Department L and
Department Q. THE Company uses a FIFO process costing
system. Department L reported the following inventory
information for June:

                                     % complete    % complete
                            units       DM          conversion 
work in process, June  1    18,000      28%           67%
work in process, June 30    34,000      71%           57%

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

                                   DM             Conversion
work in process, June 1         $ 35,240           $ 45,792
costs incurred during June       334,780            175,536

During June, Department L completed 69,000 units and
transferred them to Department Q.

The cost to complete the units in beginning work in
process was equal to:

Group of answer choices

$71,658

$81,032

$28,768

$62,910

$56,142

$77,463

$65,884

$46,890

Answer 1

Solution:

Equivalent units of production (EUP) - FIFO method
	Units	%Material	EUP-Material	% Conversion	EUP- Conversion
Beginning units completed this period (A)	18000	72%	12960	33%	5940
Units Started and Completed (69000-18000) (B)	51000	100%	51000	100%	51000
units of Ending work in process (D)	34000	71%	24140	57%	19380
Equivalent units of production (C+D)			88100		76320
Cost per EUP			Material		Conversion
Costs incurred this period (Total Costs)		Costs	$334,780	Costs	$175,536
/Equivalent units of Production		EUP	88100	EUP	76320
Cost per Equivalent unit of Production			$3.80		$2.30
Cost Assignment and Reconciliation
Beginning Inventory Cost:				$81,032
Cost to Complete Beginning Inventory	EUP	Cost per EUP	Total Cost
Direct materials	12960	$3.80	$49,248
Conversion	5940	$2.30	$13,662
Total Cost to complete Beginning Inventory				$62,910
Total Costs of units in Beginning Inventory				$143,942
Cost of units started and completed	EUP	Cost per EUP	Total Cost
Direct Material	51000	$3.80	$193,800
Conversion	51000	$2.30	$117,300
Total Cost of units started and completed				$311,100
Total cost of units transferred out				$455,042
Cost of ending work in process	EUP	Cost per EUP	Total Cost
Direct Material	24140	$3.80	$91,732
Conversion	19380	$2.30	$44,574
Total Ending work in process				$136,306
Total Costs accounted for				$591,348

Refer to above prodution cost report,

cost to complete the units in beginning work in
process was equal to = $62,910

Hence 4th option is correct.