Question

During April, the first production department of a process manufacturing system completed its work on 370,000 units of a product and transferred them to the next department. Of these transferred units, 74,000 were in process in the production department at the beginning of April and 296,000 were started and completed in April. April's beginning inventory units were 80% complete with respect to materials and 20% complete with respect to conversion. At the end of April, 96,000 additional units were in process in the production department and were 90% complete with respect to materials and 40% complete with respect to conversion.

The production department had $1,191,600 of direct materials and $818,688 of conversion costs charged to it during April. Also, its beginning inventory of $218,952 consists of $200,420 of direct materials cost and $18,532 of conversion costs.

1. Compute the direct materials cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.)
2. Compute the conversion cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.)
3. Using the FIFO method, assign April’s costs to the department’s output—specifically, its units transferred to the next department and its ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

		Equivalent units
	Physical units	Material	Conversion
Beginning WIP	74,000	14,800 (74,000*20%)	59,200 (74,000*80%)
Started and completed	296,000	296,000	296,000
Ending WIP	96,000	86,400 (96,000*90%)	38,400 (96,000*40%)
Total		397,200	393,600

	Material	Conversion
Cost charged during April	$1,191,600	$818,688
Equivalent units	397,200	393,600
Cost per equivalent unit	$3	$2.08

Direct material cost per unit = $3

Conversion cost per unit = $2.08

3.

Cost of units transferred to next department:

Beginning WIP:
Beginning balance	$218,952
Add: Cost charged during April:
Material (14,800*$3)	44,400
Conversion (59,200*$2.08)	123,136
Total	386,488
Started and completed (296,000*$5.08)	1,503,680
Cost of units transferred out	$1,890,168

Cost of ending WIP:

Material (86,400*$3)	$259,200
Conversion (38,400*$2.08)	79,872
Cost of ending WIP	$339,072