Question

For each of the following independent cases, use FIFO costing to determine the information requested.

Required: a. In the beginning inventory, 5,500 units were 40 percent complete with respect to materials. During the period, 37,000 units were transferred out. Ending inventory consisted of 7,700 units that were 60 percent complete with respect to materials. How many units were started and completed during the period?

b. At the start of the period, 4,100 units were in the work-in-process inventory; 3,100 units were in the ending inventory. During the period, 9,200 units were transferred out to the next department. Materials and conversion costs are added evenly throughout the production process. FIFO costing is used. How many units were started during this period?

c. Beginning inventory amounted to 1,000 units. This period, 4,400 units were started and completed. At the end of the period, the 3,000 units in inventory were 40 percent complete. Using FIFO costing, the equivalent production for the period was 5,700 units. What was the percentage of completion of the beginning inventory?

d. The ending inventory included $96,800 for conversion costs. During the period, 42,500 equivalent units were required to complete the beginning inventory, and 56,000 units were started and completed. The ending inventory represented 11,000 equivalent units of work this period. FIFO costing is used. What were the total conversion costs incurred this period?

Answer 1

a) Units started and completed= Units transferred out-Beginning inventory units

= 37000-5500

= 31500 units

b) Units started during this period= Units transferred out-Beginning inventory units+Ending inventory units

= 9200-4100+3100

= 8200 units

c) Let percentage of completion of beginning inventory= X

Equivalent units= Beginning inventory units+Units started and completed+Ending inventory units

5700= (1000*X/100)+4400+(3000*40%)

5700= 10X+4400+1200

5700-5600= 10X

X= 100/10= 10%

Percentage of completion of beginning inventory= 10%

d) Conversion cost per unit= $96800/11000

= $8.80 per unit

Units started this period= Equivalents units required to complete beginning inventory+Units started and completed+Ending inventory units

= 42500+56000+11000

= 109500 units

Conversion cost incurred this period= 109500*$8.80

= $963600

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