Question

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day: Beginning WIP inventory Direct materials $ 980 Conversion costs 557 Current period costs Direct materials 26,600 Conversion costs 18,090 Quantity information is obtained from the manufacturing records and includes the following: Beginning inventory 800 units (60% complete as to materials, 50% complete as to conversion) Current period units started 5,900 units Ending inventory 1,500 units (40% complete as to materials, 15% complete as to conversion) 3.Award: 10 out of 20.00 points 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.) eBook & Resources eBook: Assign costs to products using first-in, first-out (FIFO) costing. References WorksheetDifficulty: 2 MediumLearning Objective: 08-05 Assign costs to products using first-in, first-out (FIFO) costing. 4.Award: 0 out of 30.00 points Compute the cost of goods transferred out and the ending inventory using the FIFO method. (Do not round intermediate calculations.)

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				800
Add: Units Started in Process				5,900
Total Units to account for:				6,700
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				800
Units started and completed				4,400
Ending Work in Process				1,500
Total Units to be accounted for:				6,700
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			40%	320	50%	400
Units started and completed			100%	4,400	100%	4,400
Ending Work in Process			40%	600	15%	225
Total Equivalent units				5,320		5,025
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			26,600		18,090
Equivalent Units			5,320		5,025
Cost per Equivalent unit			5		3.6
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (800 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					1537
Material			320	5	1600
Conversion Cost			400	3.6	1440
Cost of units completed from Beg WIP					4577
Units started and Transferred out (4400 units)
			Equivalent unit	Cost per EU	Total Cost
Material			4,400	5	22000
Conversion Cost			4,400	3.6	15840
Total Cost of Units started and completed:					37840
Ending Work in process (1500 units)
			Equivalent unit	Cost per EU	Total Cost
Material			600	5	3000
Conversison Cost			225	3.6	810
Total cost of Ending Work in process:					3,810