Question

Production units: Opening inventory: Work in Process 4 000 (Material 100% complete; conversion 80% complete) Units received from previous process A 18 000 Units completed and transferred to process C 20 000 Closing inventory 2 000 (Material 100% complete; conversion 40% complete)

Production costs: Opening inventory: 129 500 Costs from previous process 75 100 Material 29 200 Conversion 25 200 Costs incurred in current period: 403 956 Transferred from previous process 260 100 Material 90 000 Conversion 53 856 TOTAL 533 456 R

REQUIRED: Use the first- in-first-out (FIFO) method to prepare a product cost report consisting of the following:

3.1 Quantity statement (12)

3.2 Cost statement (8)

3.3 Cost allocation statement (5)

Answer 1

FIFO method
Beggining units	4000	Transferred out	20,000
Started into production	18000	Ending units	2,000
	22000		22000
Equivalent units	Material	Conversion	Transferred in
Beginning units	4000	4000	4000
Completion in current period	0%	20%	0%
A	0	800	0
Units started and completed	16000	16000	16,000
Completion	100%	100%	100%
B	16000	16000	16000
Ending Units	2,000	2,000	2,000
Completion	100%	40%	100%
C	2000	800	2000
Total units A+B+C	18000	17600	18000
Per unit cost	Cost	Total units	Per unit cost
Material cost	90000	18000	5.00
Conversion cost	53856	17600	3.06
transferred in	260100	18000	14.45
	403956		22.51

Cost of goods sold	Material	convertion cost	transferred in
Beginning inventory completed
Completion	0%	20%	0%
Per unit cost	5.00	3.06	14.45
Units	4000	4000	4000
Total cost   A	0.00	2448	0	2448
Units started and completed
Completion	100%	100%	100%
Per unit cost	5.00	3.06	14.45
Units	16000	16000	16000
Total cost    B	80000.00	48960	231200	360160
Beginning work in progress C	29200	25200	75100	129500
Total cost A+B+C	109200	76608	306300	492108
Ending work in progress
Completion	100%	40%	100%
Per unit cost	5.00	3.06	14.45
Units	2,000	2,000	2,000
Total cost	10000	2448	28900	41348
	Total cost accounted for		533456