Question

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day.

Beginning WIP inventory
Direct materials	$	980
Conversion costs		287
Current period costs
Direct materials		11,285
Conversion costs		7,287

Quantity information is obtained from the manufacturing records and includes the following.

Beginning inventory	500	units	(60% complete as to materials, 56% complete as to conversion)
Current period units started	4,100	units
Ending inventory	1,000	units	(40% complete as to materials, 15% complete as to conversion)

Compute the cost of goods transferred out and the ending inventory using the FIFO method. (Do not round intermediate calculations.)

Answer 1

Matsui Lubricants
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	500
Units started this period	4100
Total unit to be accounted for	4600
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 40% Conversion - 44%	500	200	220
Started and completed currently	3100	3100	3100
Transferred to finished goods	3600	3300	3320
Units in ending WIP Material - 40% Conversion - 15%	1000	400	150
Total units accounted for	4600	3700	3470

Matsui Lubricants
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$18,572.00	$11,285.00	$7,287.00
Equivalent units		3700	3470
Cost per equivalent unit		$3.05	$2.10

Matsui Lubricants
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$1,267	$980	$287
Current cost added to complete beginning WIP:
Material (200*$3.05)	$610	$610
Conversion (220 * $2.10)	$462		$462
Total Cost from beginning inventory	$2,339	$1,590	$749
Current cost of unit started and completed:
Material (3100*$3.05)	$9,455	$9,455
Conversion (3100*2.10)	$6,510		$6,510
Total cost of unit started and completed	$15,965	$9,455	$6,510
Total cost of unit transferred out	$18,304	$11,045	$7,259
Cost assigned to ending WIP:
Material (400*$3.05)	$1,220	$1,220
Conversion (150*$2.10)	$315		$315
Total ending WIP inventory	$1,535	$1,220	$315
Total cost accounted for	$19,839	$12,265	$7,574