In: Statistics and Probability
FIFO method assigning costs. Do Exercise 17-24 using the FIFO method. Note that you first need to calculate the equivalent units of work done in the current period (for direct materials and conversion costs) to complete beginning work in process, to start and complete new units, and to produce ending work in process
FIFO method, assigning costs.
1. & 2. Solution Exhibit 17-25A calculates the equivalent units of work done in the current period. Solution Exhibit 17-25B summarizes total costs to account for, calculates the cost per equivalent unit of work done in the current period for direct materials and conversion costs, and assigns these costs to units completed and transferred out and to units in ending work-in-process inventory.
SOLUTION EXHIBIT 17-25A
Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units;
FIFO Method of Process Costing, Bio Doc Corporation for July 2008.
·Degree of completion in this department: direct materials, 100%; conversion costs, 70%.
†42,500 physical units completed and transferred out minus 12,500 physical units completed and transferred out from beginning work-in-process inventory.
*Degree of completion in this department: direct materials, 100%; conversion costs, 50%.
SOLUTION EXHIBIT 17-25B
Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs to Units Completed and to Units in Ending Work in Process;
FIFO Method of Process Costing, Bio Doc Corporation for July 2008.
*Equivalent units used to complete beginning work in process from Solution Exhibit 17-25A, Step 2.
†Equivalent units started and completed from Solution Exhibit 17-25A, Step 2.
#Equivalent units in ending work in process from Solution Exhibit 17-25A, Step 2.