Question

2) Shining Star Company uses an automated process to clean and polish its souvenir items. For March, the company had the following activities: Beginning work in process inventory 3,000 items, 1/3 complete with regards to conversion costs Units placed in production 12,000 units Units completed 9,000 units Ending work in process inventory 6,000 items, 2/5 complete with regards to conversion costs Cost of beginning work in process $2,500 Direct material costs, current $9,000 Conversion costs, current $8,320 Direct materials are placed into production at the beginning of the process and conversion costs are incurred evenly throughout the process. Required: Prepare a production cost worksheet using the FIFO method. PRODUCTION COST WORKSHEET
Flow of production	Physical Units	Direct Materials	Conversion
Work in process, beginning	3,000
Started during period	12,000
To account for	15,000
Units completed
Work in process, beginning
Started and completed
Work in process, ending
	15,000
Costs	Totals	Direct Materials	Conversion
Work in process, beginning	$2,500
Costs added during period	17,320
Total costs to account for	$19,820
Divided by equivalent units
Equivalent unit costs
Assignment of costs
Work in process, beginning
Completion of beginning
Total beginning inventory
Started and Completed
Total costs transferred out
Work in process, ending
Direct materials
Conversion
Costs accounted for		$19,820    PLease show all formulas on how you get numbers. This will be in an excel sheet

Answer 1

Solution:

Shining Star Company
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	3000
Units started this period	12000
Total unit to be accounted for	15000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 2/3	3000	0	2000
Started and completed currently	6000	6000	6000
Units in ending WIP Material - 100% Conversion - 2/5	6000	6000	2400
Total units accounted for	15000	12000	10400

Shining Star Company
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$17,320.00	$9,000.00	$8,320.00
Equivalent units		12000	10400
Cost per equivalent unit		$0.75	$0.80

Shining Star Company
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$2,500
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (2000 * $0.80)	$1,600		$1,600
Total Cost from beginning inventory	$4,100
Current cost of unit started and completed:
Material (6000*$0.45)	$4,500	$4,500
Conversion (6000*$0.80)	$4,800		$4,800
Total cost of unit started and completed	$9,300
Total cost of unit transferred out	$13,400
Cost assigned to ending WIP:
Material (6000*$0.45)	$4,500	$4,500
Conversion (2400*$0.80)	$1,920		$1,920
Total ending WIP inventory	$6,420
Total cost accounted for	$19,820