Question

Alpha Company had the following information for FY 2017:

Work in Process - 1/1/17	100,000 units
Units Started into Production	575,000 units
Work in Process - 12/31/17	75,000 units
Direct Material put into Production	$690,000
Conversions Costs put into Production	$1,030,625

The beginning work in process was 100% complete as to direct materials and 50% complete as to conversion costs.

The ending work in process was 100% complete as to direct materials and 75% complete as to conversion costs.

The beginning work in process consisted of:

Direct Material	$943,750
Conversion Costs	$303,750

Alpha Company uses the FIFO method. Use this information to determine for FY 2017: (Round & enter final answers to: the nearest whole dollar for total dollar answers, nearest penny for unit costs or nearest whole number for units)

1. the equivalent units of production for direct materials

2. the cost per equivalent unit for materials

3. the equivalent units of production for conversion

4. the cost per equivalent unit for conversion

5. the cost that should be assigned to Alpha' work in process inventory at the end of FY 2017

Answer 1

• All working forms part of the answer
• Working

Units Reconciliation
Units to account for:
Beginning WIP	100,000
Units started this period	575,000
Total Units to account for	675,000
Total Units accounted for:
Completed & Transferred out	600,000 [675000 – 75000]
Ending WIP	75,000
Total Units accounted for	675,000

• Requirement 1

EUP - FIFO Method	Units	% Material	EUP Materials
Units of ENDING WIP	75,000	100%	75,000
Units STARTED & COMPLETED	500,000	100%	500,000
Units of beginning WIP	100,000	0%	-
Equivalent Units of Production			575,000 units = ANSWER

• Requirement 2

COST per EUP			Material
Cost incurred this period			$       690,000.00
Total Costs		Costs	$       690,000.00
Equivalent units of production		EUP	575,000
Cost per EUP			$            1.20 = ANSWER

• Requirement 3

EUP - FIFO Method	Units	% Conversion	EUP - Conversion
Units of ENDING WIP	75,000	75%	56,250
Units STARTED & COMPLETED	500,000	100%	500,000
Units of beginning WIP	100,000	50.0%	50,000
Equivalent Units of Production			606,250 units = ANSWER

• Requirement 4

COST per EUP		Conversion
Cost incurred this period		$              1,030,625.00
Total Costs	Costs	$              1,030,625.00
Equivalent units of production	EUP	606,250
Cost per EUP		$                        1.70 = ANSWER

• Requirement 5

Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	75,000	$                   1.20	$          90,000.00
- Conversion	56,250	$                   1.70	$          95,625.00
Total cost of ending WIP				$      185,625.00 = ANSWER