Question

2) Chapter 6

The Roberto Company had computed the flow of units for Department B for the month of May as follows:

Work in process, May 1:	10,000
Transferred from Department A during May	39,000
Units to be accounted for	49,000

?

	Beginning work in process	Added during the current month
Materials	$  -0-	$235,750
Labor	12,660	166,320
Factory overhead	11,310	150,480
Total	$23,970	$552,550

Materials are added at the end of the process.  There were 8,000 units of work in process at May 31.  The work in process at May 1 was 30 percent complete as to conversion costs and the work in process at May 31 was 20 percent complete as to conversion costs.  What was the cost of the goods transferred out and in ending work in process using the FIFO method?  (Ignore transferred-in costs).

Answer 1

Solution :

Roberto Company
Department B
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	10000
Units started this period	39000
Total unit to be accounted for	49000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 100% Conversion - 70%	10000	10000	7000
Started and completed currently	31000	31000	31000
Units in ending WIP Material - 0% Conversion - 20%	8000	0	1600
Total units accounted for	49000	41000	39600

Roberto Company
Department B
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$552,550.00	$235,750.00	$316,800.00
Equivalent units		41000	39600
Cost per equivalent unit		$5.75	$8.00

Roberto Company
Department B
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$23,970	$0	$23,970
Current cost added to complete beginning WIP:
Material (10000*$5.75)	$57,500	$57,500
Conversion (7000 * $8)	$56,000		$56,000
Total Cost from beginning inventory	$137,470	$57,500	$79,970
Current cost of unit started and completed:
Material (31000*$5.75)	$178,250	$178,250
Conversion (31000*$8)	$248,000		$248,000
Total cost of unit started and completed	$426,250	$178,250	$248,000
Total cost of unit transferred out	$563,720	$235,750	$327,970
Cost assigned to ending WIP:
Material	$0	$0
Conversion (1600*$8)	$12,800		$12,800
Total ending WIP inventory	$12,800	$0	$12,800
Total cost accounted for	$576,520	$235,750	$340,770