Question

(Appendix 6A) FIFO; Production Report

Aztec Inc. produces soft drinks. Mixing is the first department, and its output is measured in gallons. Aztec uses the FIFO method. All manufacturing costs are added uniformly. For July, the mixing department provided the following information:

Production:
Units in process, July 1, 60% complete		22,000 gallons
Units completed and transferred out		138,000 gallons
Units in process, July 31, 55% complete		16,000 gallons
Costs:
Work in process, July 1		$44,000
Costs added during July		307,280

Required:

Prepare a production report.

Aztec Inc. Mixing Department
Production Report
For the Month of July (FIFO Method)
Unit Information
Physical flow:
Units to account for:	Units
Units in beginning WIP
Units started
Total units to account for
Units to account for:
	Units
Units started and completed
From beginning WIP
Units in ending WIP
Total units to account for
Equivalent units:	Units
Started and completed
To complete beginning WIP
Units in ending WIP
Total equivalent units
Cost Information
Costs to account for:
	Dollars
Costs in beginning WIP	$
Costs added by department
Total costs to account for	$
Cost per equivalent unit	$
Costs accounted for:
	Total
Transferred out:
Units started and completed	$
Units in beginning work in process:
From prior period
From current period
Total cost transferred out	$
Goods in ending work in process
Total costs accounted for	$

Answer 1

• All working forms part of the answer
• Complete Working for FIFO method:

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period
		Cost		Cost
Beginning WIP	22,000.00	60%		40%
Units introduced	132,000.00
Total units to be accounted for	154,000.00
Completed and Transferred unit	138,000.00	0%		100%
Ending WIP	16,000.00	0%		55%
STEP 2
Equivalent Units
	Total Units	Cost
Units Transferred:		% completed this period	Equivalent Units
From WIP	22,000.00	40%	8,800
From units started	116,000.00	100%	116,000
Total	138,000.00		124,800
	Total Units	Cost
Ending WIP		% completed this period	Equivalent Units
Total	16,000.00	55%	8,800
Total EUP	154,000.00		133,600
STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Cost				TOTAL
Cost incurred in Current Period	$                                     307,280.00				$    307,280.00
Total Equivalent Units	133,600
Cost per Equivalent Units	$                                                  2.30
Cost of Beginning WIP	$                                       20,000.00				$      20,000.00
Total cost to be accounted for					$    327,280.00
STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		138,000	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	Materials	124,800	$              2.30	$ 287,040.00
B
C=A+B	Total			$ 287,040.00
D	Cost of Beginning WIP			$    44,000.00
E=C+D	Total Cost of Units transferred				$    331,040.00
	Cost of	Ending WIP		16,000	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Materials	8,800	$              2.30	$    20,240.00
G
H = F + G	Total Cost of Ending WIP				$      20,240.00
I = E + H	Total Cost accounted for				$    351,280.00
J	Rounding Off Differences				0
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]				$    351,280.00

• Answers, as asked, basis of above working:

Aztec Inc. Mixing Department
Production Report
For the Month of July (FIFO Method)
Unit Information
Physical flow:
Units to account for:	Units
Units in beginning WIP	22,000
Units started	132,000
Total units to account for	154,000
Units to account for:	Units
Units started and completed	116,000
From beginning WIP	22,000
Units in ending WIP	16,000
Total units to account for	154,000
Equivalent units:	Units
Started and completed	116,000
To complete beginning WIP	8,800
Units in ending WIP	8,800
Total equivalent units	133,600
Cost Information
Costs to account for:	Dollars
Costs in beginning WIP	$    20,000.00
Costs added by department	$ 307,280.00
Total costs to account for	$ 327,280.00
Cost per equivalent unit	$               2.30
Costs accounted for:	Total
Transferred out:
Units started and completed	$ 266,800.00
Units in beginning work in process:
From prior period	$    20,000.00
From current period	$    20,240.00
Total cost transferred out	$ 307,040.00
Goods in ending work in process	$    20,240.00
Total costs accounted for	$ 327,280.00