Question
In: Accounting
Pale Blue Eyes, Inc., manufactures contact lenses, and accounts for production using a FIFO process costing...
Pale Blue Eyes, Inc., manufactures contact lenses, and accounts for production using a FIFO process costing system. The main material involved is glass, and the production process is mainly done in the grinding process center, hence all materials are added at the beginning of the production process and one work in process center is used, Grinding. Selected data regarding the grinding department during the month of September are as follows:
Production data:
Total % complete as to DM CC
Units in process, September 1st, 12,000 100 65
Units started into production 24,500
Units in process September 30th, 11,500 100 25
Cost data:
DM Cost Conv. Cost
Work in process, September 1st $ 26,500. $ 57,200.
Added during September 55,615. 147,752.
Compute the number of units transferred out of the grinding department, the equivalent units of production for September for both DM and CC, the cost per equivalent unit for both DM and CC, and the total unit product cost. What is the cost of goods transferred out, and ending inventory? Show appropriate calculations to justify your response.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
3 Fraley Chemical Company accounts for its production activities using first-in, first-out (FIFO) process costing. Inventory...
3 Fraley Chemical Company accounts for its production activities
using first-in, first-out (FIFO) process costing. Inventory records
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10,000 gallons, 80 percent complete as to materials and 40 percent
complete as to conversion. The January 31 inventory consisted of
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Pureform, Inc., uses the FIFO method in its process costing
system. It manufactures a product that passes through two
departments. Data for a recent month for the first department
follow:
Units
Materials
Labor
Overhead
Work in process inventory, beginning
68,000
$
68,700
$
22,800
$
32,900
Units started in process
649,000
Units transferred out
670,000
Work in process inventory, ending
47,000
Cost added during the month
$
804,750
$
239,590
$
409,825
The beginning work in process inventory was 80%...
Pureform, Inc., uses the FIFO method in its process costing system. It manufactures a product that...
Pureform, Inc., uses the FIFO method in its process costing
system. It manufactures a product that passes through two
departments. Data for a recent month for the first department
follow:
Units
Materials
Labor
Overhead
Work in process inventory, beginning
79,000
$
75,100
$
36,400
$
49,100
Units started in process
751,000
Units transferred out
800,000
Work in process inventory, ending
30,000
Cost added during the month
$
1,557,385
$
612,440
$
688,995
The beginning work in process inventory was 70%...
Pureform, Inc., uses the FIFO method in its process costing system. It manufactures a product that...
Pureform, Inc., uses the FIFO method in its process costing
system. It manufactures a product that passes through two
departments. Data for a recent month for the first department
follow:
Units
Materials
Labor
Overhead
Work in process inventory, beginning
5,000
$
4,320
$
1,040
$
1,790
Units started in process
45,000
Units transferred out
42,000
Work in process inventory, ending
8,000
Cost added during the month
$
52,800
$
21,500
$
32,250
The beginning work in process inventory was 80%...
Pureform, Inc., uses the FIFO method in its process costing system. It manufactures a product that...
Pureform, Inc., uses the FIFO method in its process costing
system. It manufactures a product that passes through two
departments. Data for a recent month for the first department
follow: Units Materials Labor Overhead Work in process inventory,
beginning 65,000 $ 68,500 $ 5,700 $ 21,400 Units started in process
617,000 Units transferred out 610,000 Work in process inventory,
ending 72,000 Cost added during the month $ 1,484,100 $ 268,290 $
327,910 The beginning work in process inventory was 75%...
Randall Inc. manufactures pocket protectors and uses the FIFO method of process costing. Direct materials are...
Randall Inc. manufactures pocket protectors and uses the FIFO
method of process costing. Direct materials are added at the
beginning of the production process. Conversion costs are incurred
evenly throughout production. Inspection takes place at the end of
the production process. After inspection, some units are spoiled
due to defects. Spoiled units generally constitute 1% of the good
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spoilage is from the current month’s production. Data provided for
February is as...
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BeginningInventory
EndingInventory
Raw materials inventory
$
60,000
$
92,500
Work in process inventory
435,000
515,000
Finished goods inventory
633,000
605,000
The following additional information describes the company's production activities for May.
Raw materials...
In detail discuss what are the advantages and disadvantages of using FIFO for process costing. In...
In detail discuss what are the advantages and disadvantages of
using FIFO for process costing. In periods when costs are
increasing how will FIFO affect reported net income? What about in
periods of declining costs? Explain.
Process Costing using the FIFO Method A process cost system is used when a company produces...
Process Costing using the FIFO Method
A process cost system is used when a company produces a product
that is homogeneous-that is, individual units are indistinguishable
from each other.
Costs flow from one production department to the next and
materials, labor and overhead are added until the final product is
moved to finished goods inventory ready to be sold. The flowchart
illustrates the flow of costs into Work in Process and Finished
Goods in a process costing system.
Cost Flows...
Process Costing using the FIFO Method A process cost system is used when a company produces...
Process Costing using the FIFO Method
A process cost system is used when a company produces a product
that is homogeneous-that is, individual units are indistinguishable
from each other.
Costs flow from one production department to the next and
materials, labor and overhead are added until the final product is
moved to finished goods inventory ready to be sold. The flowchart
illustrates the flow of costs into Work in Process and Finished
Goods in a process costing system.
Cost Flows...
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