Question

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QualCo manufactures a single product in two departments: Cutting and Assembly. During May, the Cutting department completed a number of units of a product and transferred them to Assembly. Of these transferred units, 39,400 were in process in the Cutting department at the beginning of May and 169,500 were started and completed in May. May’s Cutting department beginning inventory units were 60% complete with respect to materials and 40% complete with respect to conversion. At the end of May, 53,200 additional units were in process in the Cutting department and were 60% complete with respect to materials and 20% complete with respect to conversion. The Cutting department had $542,950 of direct materials and $407,560 of conversion cost charged to it during May. Its beginning inventory included $75,975 of direct materials cost and $30,393 of conversion cost.

2-4. Using the FIFO method, assign May’s costs to the units transferred out and assign costs to its ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

Equivalent units of production (EUP)- FIFO method Units % Materials EUP- Materials % Conversion EUP- Conversion Total units Cost per equivalent unit of production Materials Conversion Total costs Costs Costs ÷ Equivalent units of production EUP EUP Cost per equivalent unit of production (rounded to 2 decimals) Total costs accounted for: Beginning Inventory Cost: Cost to complete units in beginning inventory EUP Cost per EUP Total cost Direct materials Conversion Total cost to complete beginning inventory Cost of units started and completed EUP Cost per EUP Total cost Direct materials Conversion Total cost of units started and completed Total cost of units transferred out Costs of ending work in process EUP Cost per EUP Total cost Direct materials Conversion Total cost of ending work in process Total costs accounted for

Answer 1

Solution:

Equivalent units of production (EUP) - FIFO method
	Units	%Material	EUP-Material	% Conversion	EUP- Conversion
Beginning units completed this period (A)	39400	40%	15760	60%	23640
Units Started and Completed (B)	169500	100%	169500	100%	169500
units of Ending work in process (D)	53200	60%	31920	20%	10640
Equivalent units of production (C+D)			217180		203780
Cost per EUP			Material		Conversion
Costs incurred this period (Total Costs)		Costs	$5,42,950	Costs	$4,07,560
/Equivalent units of Production		EUP	217180	EUP	203780
Cost per Equivalent unit of Production			$2.50		$2.00
Cost Assignment and Reconciliation
Beginning Inventory Cost:				$1,06,368
Cost to Complete Beginning Inventory	EUP	Cost per EUP	Total Cost
Direct materials	15760	$2.50	$39,400
Conversion	23640	$2.00	$47,280
Total Cost to complete Beginning Inventory				$86,680
Total Costs of units in Beginning Inventory				$1,93,048
Cost of units started and completed	EUP	Cost per EUP	Total Cost
Direct Material	169500	$2.50	$4,23,750
Conversion	169500	$2.00	$3,39,000
Total Cost of units started and completed				$7,62,750
Total cost of units transferred out				$9,55,798
Cost of ending work in process	EUP	Cost per EUP	Total Cost
Direct Material	31920	$2.50	$79,800
Conversion	10640	$2.00	$21,280
Total Ending work in process				$1,01,080
Total Costs accounted for				$10,56,878