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Problem 20-5AA FIFO: Process cost summary; equivalent units; cost estimates LO C3, C4, P4

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Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 24,700 units of product to finished goods inventory. Its 3,500 units of beginning work in process consisted of $89,120 of direct materials and $806,926 of conversion costs. It has 2,650 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $570,015 of direct material costs and $2,331,014 of conversion costs were charged to production.

• Beginning work in process consisted of 3,500 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion.
• Of the 24,700 units completed, 3,500 were from beginning work in process. The remaining 21,200 were units started and completed during May.

Assume that Tamar uses the FIFO method to account for its process costing system.

Problem 20-5A Part 1

1. Prepare the company’s process cost summary for May using the FIFO method. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				3,500
Add: Units Started in Process				23,850
Total Units to account for:				27,350
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				3500
Units started and completed				21,200
Ending Work in Process				2,650
Total Units to be accounted for:				27,350
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	60%	2,100
Units started and completed			100%	21,200	100%	21,200
Ending Work in Process			100%	2,650	80%	2,120
Total Equivalent units				23,850		25,420
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			570,015		2,331,014
Equivalent Units			23,850		25,420
Cost per Equivalent unit			23.9		91.7
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (3500 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					896046
Material			0	23.9	0
Conversion Cost			2,100	91.7	192570
Cost of units completed from Beg WIP					1088616
Units started and Transferred out (21200 units)
			Equivalent unit	Cost per EU	Total Cost
Material			21,200	23.9	506680
Conversion Cost			21,200	91.7	1944040
Total Cost of Units startedand transferred out:					2450720
Ending Work in process (2650 units)
			Equivalent unit	Cost per EU	Total Cost
Material			2,650	23.9	63335
Conversison Cost			2,120	91.7	194404
Total cost of Ending Work in process:					257,739