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Hassan Limited uses the FIFO method in its process costing system. The data given relates to...

Hassan Limited uses the FIFO method in its process costing system. The data given relates to the most recent month of operations for one of the processing departments:

                                                                                

Opening units

500

Units started into production

3,000

Closing units

300

Material

Conversion

Percentage completion of opening inventory

80%

40%

Percentage completion of closing inventory

70%

60%

                                                                

The cost of beginning inventory was Rs.10,040 of which Rs.7,120 was for materials and the remainder was for conversion cost. The costs added during the month amounted to Rs.132,730 of which Rs.76,048 was for materials and the remainder was for conversion cost.                                                                        

Required:                                                                            

1. Compute the equivalent units of material and of conversion in the ending inventory. (2 Mark)               

2. Compute the equivalent units of material and of conversion that were required to complete the beginning inventory.                                                                                                                                           (2 Mark)               

3. Determine the number of units started and completed during the month.                      (1 Mark)               

4. Compute the cost per equivalent unit for materials and for conversion and the total cost per equivalent unit.                                                                                                                                                 (1 Mark)

5. Determine the cost of units transferred out.                                                                                               

6. Determine the cost of ending inventory                                                                                          

  

Solutions

Expert Solution

Solution:

4.

5.

Determine the cost of units transferred out.    $141376

6.

Determine the cost of ending inventory    - $8514

Workings for 5 & 6

Hope this helps! In case of any clarifications, kindly use the comment box below

ekkarill92 answered 1 year ago
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