Question

Pacific Ink had beginning work-in-process inventory of $1,070,790 on October 1. Of this amount, $436,900 was the cost of direct materials and $633,890 was the cost of conversion.The 65,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs.

During October, 136,000 units were transferred out and 47,000 remained in ending inventory.The units in ending inventory were 80 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. Costs incurred during the period amounted to $3,390,200 for direct materials and $4,343,130 for conversion.

3.

value:
10.00 points

Required information

Required:

(1) Compute the equivalent units for the materials and conversion cost calculations.

(2) Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method. (Round your answers to 2 decimal places.)

References

eBook & Resources

WorksheetDifficulty: 2 MediumLearning Objective: 08-05 Assign costs to products using first-in, first-out (FIFO) costing.

Check my work

4.

value:
15.00 points

Required information

a-1. Compute the cost of goods transferred out and the cost of ending inventory using the FIFO method. (Round intermediate calculations to 2 decimal places.)

a-2. Is the ending inventory higher or lower under the weighted-average method compared to FIFO?

	Higher

Answer 1

FIFO method
Beggining units	65000	Transferred out	1,36,000
Started into production	118000	Ending units	47,000
	183000		183000
Equivalent units	Material	Conversion
Beginning units	65000	65000
Completion in current period	70%	70%
A	45500	45500
Units started and completed	71000	71000
Completion	100%	100%
B	71000	71000
Ending Units	47,000	47,000
Completion	80%	40%
C	37600	18800
Total units A+B+C	154100	135300
Cost per equivalent units
Per unit cost	Cost	Total units	Per unit cost
Material cost	3390200	154100	22.00
Conversion cost	4343130	135300	32.10
Total	7733330		54.10

Cost of goods sold	Material	convertion cost
Beginning work in progress A	436900	633890	1070790
Beginning inventory completed
Completion	70%	70%
Per unit cost	22.00	32.10
Units	65000	65000
Total cost   B	1001000	1460550	2461550
Units started and completed
Completion	100%	100%
Per unit cost	22.00	32.10
Units	71000	71000
Total cost    C	1562000	2279100	3841100
Total cost A+B+C	2999900	3739650	7373440
Ending work in progress
Completion	80%	40%
Per unit cost	22.00	32.10
Units	47,000	47,000
Total cost	827200	603480	1430680

Weighted average cost
Beggining units	65000	Transferred out	1,36,000
Started intro production	118000	Ending units	47,000
Units accounted for	183000		183000
Equivalent units	Material	Conversion cost
Units transferred                      A	136000	136000
Ending Units	47,000	47,000
Completion	80%	40%
B	37600	18800
Total units	173600	154800
Cost per equivalent units
Particulars	Material	Conversion cost	total
As at beginning	436900	633890	1070790
Added during the month	3390200	4343130	7733330
Cost to be accounted for	3827100	4977020	8804120
Total eqivalent units	173600	154800
Cost per equivalent unit	22.05	32.15	54.20
Cost per equivalent unit = Cost to be accounted for / Total equivalent units

	Cost of ending work in progress
			Conversion cost
	Particulars	Material		Total
	Ending units	47,000	47,000
	Cost per equivalent units	22.05	32.15
	Completion	80%	40%
	Total cost	828911	604444	1433355
	Cost of goods transferred		Conversion cost
	Particulars	Material		Total
	Number of units	136000	136000
	Cost per equivalent units	22.05	32.15	54.20
	Total amount	2998189	4372576	7370765

Higher in weighted average