Question

Malfoy Industries, who uses the FIFO method of process costing, manufactures products in three sequential processes: Molding, Plating, and Finishing. In the Plating process, direct materials are added at the beginning of the process, while conversion costs are incurred evenly throughout the process. The normal spoilage rate in the Plating process is 1% of good units produced. Malfoy provided the following information about the Plating process in June:

Work-in-Process Inventory	Beginning	Ending
Units	700	900
Percent of Process Complete	30%	60%
Costs Incurred	Beginning Work-in-Process	Current Period
Transferred-In Costs	$1,500.00	$9,400.00
Direct Materials Costs	$2,330.00	$17,800.00
Conversion Costs	$1,025.00	$12,156.00
Units	Started	Completed and Transferred Out
Units	5,500	5,200

Find the following:

Cost per equivalent unit for transferred-in costs:

Dollars

2)

Cost per equivalent unit for direct materials:

Dollars

3)

Cost per equivalent unit for conversion costs:

Dollars

4)

The value of good units completed and transferred out:

Dollars

5)

The value of abnormal spoilage:

Dollars

6)

The value of ending work in process inventory:

Dollars

Answer 1

	Proess Costing
	Statement of Equialent Prodution Units ( Under FIFO Method)
	Particulars	Input Units	Particulars	Output Units	Equivalent Production
					%	Equivalent units
	Opening WIP	700	From opening WIP	700	70%	490
	Units introduced	5500	Fresh inputs	4500	100%	4500
			Units completed and transferred to next process	5200
			Normal loss (1% of 5200)	52	52	-
			Closing WIP	900	60%	540
			Abnormal Loss (Bal. Fig.)	48	100%	48
		6200		6200
	Computation Cost per Equivalent Production Unit:
	Cost of opening WIP =		4855
	Cost of the process for the period =		39356
	Total Process Cost		44211
	Cost Per Equivqlent Unit =	Total Process Cost
		Input units - Normal loss units
	=	44211
		(6200 - 52)
	=	7.191 per unit
	Statement of Evaluation
	Particulars	Equivalent units	Cost per units ($)	Amount
1	Opening WIP completed during the period	490	7.191	3523.59
	Add: cost of WIP @ the beginning	-	-	4855
	Complete cost of 700 of opening WIP			8378.59
2	Completely processed Units	4500	7.191	32359.5
3	Abnormal Loss	48	7.191	345.168
4	Closing WIP	900	7.191	6471.9