Question

Chilly

​Clothing, Inc., is a manufacturer of winter clothes. It has a knitting department and a finishing department. This exercise focuses on the finishing department. Direct materials are added at the end of the process. Conversion costs are added evenly during the process. Suppose that

Chilly

uses the FIFO method. The following information for June

2017

is available.

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Requirement 1. Calculate equivalent units of work done in the current period​ (for transferred-in​ costs, direct​ materials, and conversion​ costs) to complete beginning work in​ process, to start and complete new​ units, and to produce ending work in process.​ (Enter a​ "0" for any zero​ balances.)

		Equivalent Units
	Physical Units	Transferred-In	Direct	Conversion
	(tons)	Costs	Materials	Costs
Work in process, beginning	105
Transferred-in during current period	160
To account for	265
Completed and transferred out during current period:
From beginning work in process	105
Started and completed	105
Work in process, ending	55
Accounted for
Equivalent units of work done in current period

	A	B	C	D	E
1		Physical Units (tons)	Transferred-In Costs	Direct Materials	Conversion Costs
2	Work in process, beginning inventory (June 1)	105	$90,000	$0	$31,500
3	Degree of completion, beginning work in process		100%	0%	60%
4	Transferred-in during June	160
5	Completed and transferred out during June	210
6	Work in process, ending inventory (June 30)	55
7	Degree of completion, ending work in process		100%	0%	60%
8	Total costs added during June		$189,000	$57,750	$107,100

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Answer 1

	Physcial units	Transferred in	Material	Conversion
Work in Process Beginning	105
Started during the period	160
To account for	265
Work in Process Beginning	105	0	105	42
Units started and completed	105	105	105	105
Units transferred to next department	210	105	210	147
Ending Work in Process :	55	55	0	33
Accounted for	265
Equivalent units		160	210	180
	Transferred in	Material	Conversion	Total
Cost of Beginning Work in Process	$          90,000	$                   -	$             31,500	$           121,500
Cost added during the period	$        189,000	$          57,750	$           107,100	$           353,850
Total Costs to account for	$        279,000	$          57,750	$           138,600	$           475,350
	Transferred in	Material	Conversion	Total
Cost added during the period	$        189,000	$          57,750	$           107,100	$           353,850
Equivalent units of Production	160	210	180
Cost per equivalent unit	$      1,181.25	$          275.00	$             595.00	$          2,051.25
	Transferred in	Material	Conversion	Total
Ending work in Process Inventory
Equivalent units of Production	55	0	33
Cost per equivalent unit	$      1,181.25	$          275.00	$             595.00
Cost of Ending work in Process Inventory	$          64,969	$                   -	$             19,635	$             84,604
	Transferred in	Material	Conversion	Total
Units Completed and transferred out
Cost of Beginning Work in Process	$          90,000	$                   -	$             31,500	$           121,500
Cost of work on Beginning Work in Process	$                   -	$          28,875	$             24,990	$             53,865
Total Cost of Beginning WIP	$          90,000	$          28,875	$             56,490	$           175,365
Units started and completed	105	105	105
Cost per equivalent unit	$      1,181.25	$          275.00	$             595.00
Cost of units started and completed	$       124,031	$          28,875	$             62,475	$           215,381
Cost of units transferred out				$           390,746
Total Costs accounted for				$           475,350