Question

Question 1

The inventory at April 1, 2020, and the costs charged to Work in Process--Department B during April for Worldwide Company are as follows:

1,200 units, 40% completed	$  47,800
From Department A, 26,000 units	845,000
Direct labor	312,000
Factory overhead	176,770

During April, all direct materials are transferred from Department A. In Department B, the units in process at April 1 were completed, and of the 26,000 units entering the department, all were completed except 1,000 units which were 70% completed as to conversion costs. Inventories are costed by the first-in, first-out method.

Required:

Prepare a cost of production report for Department B for the month April 2020.

Answer 1

Worldwide Company
Department B
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	1200
Units started this period	26000
Total unit to be accounted for	27200
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 60%	1200	0	720
Started and completed currently	25000	25000	25000
Transferred to finished goods	26200	25000	25720
Units in ending WIP Material - 100% Conversion - 70%	1000	1000	700
Total units accounted for	27200	26000	26420

Worldwide Company
Department B
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$1,333,770.00	$845,000.00	$488,770.00
Equivalent units		26000	26420
Cost per equivalent unit		$32.50	$18.50

Worldwide Company
Department B
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$47,800
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (720 * $18.50)	$13,320		$13,320
Total Cost from beginning inventory	$61,120
Current cost of unit started and completed:
Material (25000*$32.50)	$812,500	$812,500
Conversion (25000*18.50)	$462,500		$462,500
Total cost of unit started and completed	$1,275,000
Total cost of unit transferred out	$1,336,120
Cost assigned to ending WIP:
Material (1000*$32.50)	$32,500	$32,500
Conversion (700*$18.50)	$12,950		$12,950
Total ending WIP inventory	$45,450
Total cost accounted for	$1,381,570