Question

PART III: PROCESS COSTING      /22 MARKS

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Easy Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month:

Work in process, beginning:

Units in process​300

Stage of completion with respect to materials​60%

Stage of completion with respect to conversion​80%

Costs in the beginning inventory:

Materials cost​$594

Conversion cost​$8,256

Units started into production during the month​26,000

Units completed and transferred out​25,500

Costs added to production during the month:

Materials cost​$79,732

Conversion cost​$887,626

Work in process, ending:

Units in process​800

Stage of completion with respect to materials​50%

Stage of completion with respect to conversion​40%

Required:

Prepare a production report for the department using the FIFO method:

Include the following:

a. Quantity schedule that shows total units accounted for and equivalent units (material, conversion).

b. Total costs to be accounted for: cost per equivalent unit for material, conversion and total. You should also complete the dollar reconciliation either as part of section b and c or separately.

c. Costs accounted for: cost of units transferred out and work-in-process

Answer 1

	Easy Inc.
	Production Cost Report (FIFO)
		Actual Units
	Caluclation of Physical UNITS:
	Units in begining inventory	300
	Units started during the period	26000
	Units to be accounted for	26300
		Actual Units	Equivalent Units
			Material	CC
	Units Completed and Transferred	25500
	From units in beginning inventory	300	120	60
	From units started	25200	25200	25200
	Units in ending inventory	800	400	320
A)	Total accounted for	26300	25720	25580
	Costs:
		Total	Material	CC
	Costs in beginning inventory	0	0	0
	Cost added dueing the year	967358	79732	887626
	Total cost to account for	967358	79732	887626
	Equivalent Units from above		25720	25580
B)	Cost per equivalnet unit	37.80	3.10	34.70
		Total	Material	CC
C)	Cost Accounted for
	Units completed and transfer	0	0	0
	From units in beginning inventory	2454	372	2082
	From units started	952560	78120	874440
	Units in ending inventory	12344	1240	11104
	Total Cost Accounted for	967358	79732	887626