Question

Production Data Physical units Prior Material Prior Conversion Current Material Current Conversion

BI Units 8 90% 40% ? ?

Units Started 50   

Units completed & To 46 100%   100%

EI Units   12 60% 30%

Costs data: Materials Conversion

Prior period costs (BI) $4,933,600 $910,400

Current Costs (added) $32,200,000 $13,920,000

Find the Equivalent Units, costs per Equivalent units, and Cost Reconciliation

Cost Reconciliation
			Equivalent Units
	Total Cost		Materials		Conversion
Cost accounted for as follows:
Transferred to Finished Goods:
From the beginning inventory:
Cost in the beginning inventory
Cost to complete these units
Materials
Conversion
Total cost from beginning inventory
Units started and completed this month
Total cost transferred
Work in process, Dec. 31:
Materials
Conversion
Total work in process
Total cost accounted for

Answer 1

Solution:

Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	8
Units started this period	50
Total unit to be accounted for	58
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 10% Conversion - 60%	8	0.8	4.8
Started and completed currently	38	38	38
Transferred to finished goods	46	38.8	42.8
Units in ending WIP Material - 60% Conversion - 30%	12	7.2	3.6
Total units accounted for	58	46	46.4

Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$46,120,000.00	$32,200,000.00	$13,920,000.00
Equivalent units		46	46.4
Cost per equivalent unit		$700,000.00	$300,000.00

Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$5,844,000	$4,933,600	$910,400
Current cost added to complete beginning WIP:
Material (0.8*700000)	$560,000	$560,000
Conversion (4.8 * $300,000)	$1,440,000		$1,440,000
Total Cost from beginning inventory	$7,844,000	$5,493,600	$2,350,400
Current cost of unit started and completed:
Material (38*$700,000)	$26,600,000	$26,600,000
Conversion (38*$300,000)	$11,400,000		$11,400,000
Total cost of unit started and completed	$38,000,000	$26,600,000	$11,400,000
Total cost of unit transferred out	$45,844,000	$32,093,600	$13,750,400
Cost assigned to ending WIP:
Material (7.2*$700,000)	$5,040,000	$5,040,000
Conversion (3.60*$300,000)	$1,080,000		$1,080,000
Total ending WIP inventory	$6,120,000	$5,040,000	$1,080,000
Total cost accounted for	$51,964,000	$37,133,600	$14,830,400