Question

In: Accounting

The Poolside Company uses a FIFO process costing system. The following data are available: Beginning inventory...

The Poolside Company uses a FIFO process costing system. The following data are available: Beginning inventory 1,000 units (100% complete as to materials and 50% complete as to labor and overhead); Units started in production 19,000; Units finished during the period 16,000; Units in process at the end of the period (100% complete as to materials and 25% complete as to labor and overhead) 4,000; Costs in beginning inventory were materials of $1,500 and Labor and overhead costs $1,000; Cost added during the period were $35,200 for materials and Labor and overhead costs of $37,400.

What is the FIFO cost per equivalent units of labor and overhead added for the period? (Round to the nearest $.001.)

What is the FIFO value of labor and overhead in ending Work in Process Inventory for the period? (Round to the nearest $1.00.)

Solutions

Expert Solution

1) Statement of cost per equivalent production
Element of costs Units Costs Cost/eq. units
Direct Material 19000 $        35,200.00 $                1.853
Labor and Overhead 16500 $        37,400.00 $                2.267
$                4.119

2)

Cost of Ending WIP
Units Cost/eq. units Costs
Direct Material 4000 $                 1.85 $            7,411
Labor and Overhead 1000 $                 2.27 $            2,267
Total $            9,677

Workings:

Statement of equivalent production Degree of completion
Direct Material Conversion
Particulars Units Particulars Units % Units % Units
Beginning WIP 1000 Transfer to next process:
Units Started 19000 From Beginning WIP 1000 - - 50% 500
From Units Started 15000 100% 15000 100% 15000
Ending WIP 4000 100% 4000 25% 1000
20000 20000 19000 16500

Please let me know if you find anything incorrect. Thank you


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