Question

Pacific Ink had beginning work-in-process inventory of $1,069,960 on October 1. Of this amount, $459,200 was the cost of direct materials and $610,760 was the cost of conversion.The 63,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs.

During October, 132,000 units were transferred out and 45,000 remained in ending inventory.The units in ending inventory were 80 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. Costs incurred during the period amounted to $3,578,400 for direct materials and $4,182,090 for conversion.

a-1. Compute the cost of goods transferred out and the cost of ending inventory using the FIFO method. (Round intermediate calculations to 2 decimal places.)

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				63,000
Add: Units Started in Process				114,000
Total Units to account for:				177,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				63000
Units started and completed				69,000
Ending Work in Process				45,000
Total Units to be accounted for:				177,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			70%	44,100	70%	44,100
Units started and completed			100%	69,000	100%	69,000
Ending Work in Process			80%	36,000	40%	18,000
Total Equivalent units				149,100		131,100
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			3,578,400		4,182,090
Equivalent Units			149,100		131,100
Cost per Equivalent unit			24		31.9
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (63000 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					1069960
Material			44,100	24	1058400
Conversion Cost			44,100	31.9	1406790
Cost of units completed from Beg WIP					3535150
Units started and Transferred out (69000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			69,000	24	1656000
Conversion Cost			69,000	31.9	2201100
Total Cost of Units completed and transferred out:					3857100
Ending Work in process (45,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			36,000	24	864000
Conversison Cost			18,000	31.9	574200
Total cost of Ending Work in process:					1,438,200
Cost of Goods transferred out (3857100+3535150):					7392250
Cost of Ending Wip:					1438200