Question

Prepare a cost of production report for the Machining Department for May using the FIFO method of costing.

Phillips Company needs to prepare a cost of production report for the machining department. The follow data has been provided:

1. Work in process, May 1, had 90,000 units that were 40% completed and the following costs:
   Direct materials       $72,720
   Direct labor       $108,000
   Overhead       $36,000

2. During the month of May, 180,000 units were completed and transferred to the next department and the following costs were added to production:
   Direct materials       $216,000
   Direct labor       $144,000
   Overhead       $162,000

3. On May 31, there were 45,000 partially completed units in process. These units were 80% complete.

Answer 1

• Various elements of Cost of Production report are provided below

Costs Charged to Production:
Cost of beginning WIP	$                     216,720.00
Costs incurred this period	$                     522,000.00
Total Cost to account for	$                     738,720.00
Total costs accounted for	$                     738,720.00
Difference due to rounding cost/unit	$                                      -
Units Reconciliation
Units to account for:
Beginning WIP	90,000
Units started this period	135,000
Total Units to account for	225,000
Total Units accounted for:
Completed & Transferred out	180,000
Ending WIP	45,000
Total Units accounted for	225,000

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	45,000	100.0%	45,000	80.0%	36,000
Units STARTED & COMPLETED	90,000	100%	90,000	100%	90,000
Units of beginning WIP	90,000	0.00%	-	60%	54,000
Equivalent Units of Production			135,000		180,000
COST per EUP			Material		Conversion
Cost incurred this period			$       216,000.00		$                  306,000.00
Total Costs		Costs	$       216,000.00	Costs	$                  306,000.00
Equivalent units of production		EUP	135,000	EUP	180,000
Cost per EUP			$                1.6000		$                          1.7000

COST ASSIGNMENT & RECONCILIATION
Cost Transferred out:	EUP	Cost per EUP	Total Cost
Cost of Beginning WIP			216,720.00
Cost to complete beginning WIP-
- Direct Materials	-	1.60	-
- Conversion	54,000.00	1.70	91,800.00
Total cost to complete beginning WIP			308,520.00
Cost of Units started & completed this period:	EUP	Cost per EUP	Total Cost
- Direct Materials	90,000.00	1.60	144,000.00
- Conversion	90,000.00	1.70	153,000.00
Total costs started & Completed this period			297,000.00
Total cost of work finished this period				605,520.00
Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	45,000	$                              1.60	$          72,000.00
- Conversion	36,000	$                              1.70	$          61,200.00
Total cost of ending WIP				$             133,200.00
Total costs accounted for				$             738,720.00