Question

Lansing, Inc. provides the following information for one of its department’s operations for June (no new material is added in Department T): WIP inventory—Department T Beginning inventory (15,000 units, 60% complete with respect to Department T costs) Transferred-in costs (from Department S) $ 116,000 Department T conversion costs 53,150 Current work (35,000 units started) Prior department costs 280,000 Department T costs 209,050 The ending inventory has 5,000 units, which are 20 percent complete with respect to Department T costs and 100 percent complete for prior department costs. Required: Complete the production cost report using FIFO. (Round "Cost per equivalent unit" to 2 decimal places.)

Answer 1

Solution :

Lansing Inc.
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Transferred In	Conversion
Units to be accounted for:
Beginning WIP Inventory	15000
Units started this period	35000
Total unit to be accounted for	50000
Units Accounted for:
Units completed and transferred out
From beginning inventory Transferred In - 0% Conversion - 40%	15000	0	6000
Started and completed currently	30000	30000	30000
Transferred to finished goods	45000	30000	36000
Units in ending WIP Transferred In - 100% Conversion - 20%	5000	5000	1000
Total units accounted for	50000	35000	37000

Lansing Inc.
Computation of Cost per Equivalent unit
Particulars	Total cost	Transferred In	Conversion
Current period cost	$489,050.00	$280,000.00	$209,050.00
Equivalent units		35000	37000
Cost per equivalent unit		$8.00	$5.65

Lansing Inc.
Producton cost report - FIFO
Particulars	Total cost	Transferred In	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$169,150	$116,000	$53,150
Current cost added to complete beginning WIP:
Transferred In	$0	$0
Conversion (6000 * 5.65)	$33,900		$33,900
Total Cost from beginning inventory	$203,050	$116,000	$87,050
Current cost of unit started and completed:
Transferred In (30000*$8)	$240,000	$240,000
Conversion (30000*$5.65)	$169,500		$169,500
Total cost of unit started and completed	$409,500	$240,000	$169,500
Total cost of unit transferred out	$612,550	$356,000	$256,550
Cost assigned to ending WIP:
Transferred In (5000*$8)	$40,000	$40,000
Conversion (1000*$5.65)	$5,650		$5,650
Total ending WIP inventory	$45,650	$40,000	$5,650
Total cost accounted for	$658,200	$396,000	$262,200