Question

Yarmouth Company produces a liquid solvent in two departments: Mixing and Finishing. Accounting records at Yarmouth show the following information for Finishing operations for February (no new material is added in the Finishing Department):

WIP inventory—Finishing
Beginning inventory (11,200 units, 20% complete with respect to Finishing costs)
Transferred-in costs (from Mixing)	$	134,320
Finishing conversion costs		1,096
Current work (100,400 units started)
Mixing costs		1,004,000
Finishing costs		537,056

The ending inventory has 15,200 units, which are 60 percent complete with respect to Finishing Department costs and 100 percent complete for Mixing Department costs.

Required:
a. Complete the production cost report using the FIFO method. (Round "Cost per equivalent unit" to 2 decimal places.)

Answer 1

Solution a:

Yarmouth Company
Finishing Department
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Mixing	Finishing
Units to be accounted for:
Beginning WIP Inventory	11200
Units started this period	100400
Total unit to be accounted for	111600
Units Accounted for:
Units completed and transferred out
From beginning inventory Mixing - 0% Finishing - 80%	11200	0	8960
Started and completed currently	85200	85200	85200
Units in ending WIP Material - 100% Conversion - 60%	15200	15200	9120
Total units accounted for	111600	100400	103280

Yarmouth Company
Finishing Department
Computation of Cost per Equivalent unit
Particulars	Total cost	Mixing	Finishing
Current period cost	$1,541,056.00	$1,004,000.00	$537,056.00
Equivalent units		100400	103280
Cost per equivalent unit		$10.00	$5.20

Yarmouth Company
Finishing Department
Producton cost report - FIFO
Particulars	Total cost	Mixing	Finishing
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$135,416.00	$134,320.00	$1,096.00
Current cost added to complete beginning WIP:
Mixing	$0.00	$0.00
Finishing (8960 * $5.20)	$46,592.00		$46,592.00
Total Cost from beginning inventory	$182,008.00	$134,320.00	$47,688.00
Current cost of unit started and completed:
Mixing (85200*$10)	$852,000.00	$852,000.00
Conversion (85200*$5.20)	$443,040.00		$443,040.00
Total cost of unit started and completed	$1,295,040.00	$852,000.00	$443,040.00
Total cost of unit transferred out	$1,477,048.00	$986,320.00	$490,728.00
Cost assigned to ending WIP:
Mixing (15200*$10)	$152,000.00	$152,000.00
Conversion (9120*$5.20)	$47,424.00		$47,424.00
Total ending WIP inventory	$199,424.00	$152,000.00	$47,424.00
Total Cost Accounted for	$1,676,472.00	$1,138,320.00	$538,152.00