In: Accounting
Johnson Company adds materials, 50% at the start of the process and 50% at the end of the process in Department A. Conversion costs were 70% complete as to the 8,000 units in process on January 1 and 50% as to the 6,000 units in process on January 31. During the month of January, 12,000 units were transferred to Department B. An analysis of the costs relating to Work in Process is as follows:
Work in process, 1/1
Materials, P12,000; Conversion costs, P25,000
Costs added during the month:
Materials, P63,030; Conversion costs, P105,750
Using FIFO Method, the total unit cost per EUP is?
Correct answer-----------
Material | Conversion | TOTAL | |
Cost per Equivalent Units | $ 5.73 | $ 11.25 | $ 16.98 |
Working
STEP 1 (FIFO) | |||||
Reconciliation of Units | |||||
Units | % already completed | % completed this period | |||
Material | Conversion | Material | Conversion | ||
Beginning WIP | 8,000 | 50% | 70% | 50% | 30% |
Units introduced | 10,000 | ||||
Total units to be accounted for | 18,000 | ||||
Completed and Transferred unit | 12,000 | 0% | 0% | 100% | 100% |
Ending WIP | 6,000 | 0% | 0% | 50% | 50% |
..
STEP 2 (FIFO) | |||||
Equivalent Units | |||||
Total Units | Material | Conversion | |||
Units Transferred: | % completed this period | Equivalent Units | % completed this period | Equivalent Units | |
From WIP | 8,000 | 50% | 4,000 | 30% | 2,400 |
From units started/Introduced | 4,000 | 100% | 4,000 | 100% | 4,000 |
Total | 12,000 | 8,000 | 6,400 | ||
Total Units | Material | Conversion | |||
Ending WIP | % completed this period | Equivalent Units | % completed this period | Equivalent Units | |
Total | 6,000 | 50% | 3,000 | 50% | 3,000 |
Total EUP | 18,000 | 11,000 | 9,400 |
..
STEP 3 | |||
Cost per Equivalent Units AND Cost to be accounted for | |||
Material | Conversion | TOTAL | |
Cost incurred in Current Period | $ 63,030 | $ 105,750 | $ 168,780 |
Total Equivalent Units | 11,000 | 9,400 | |
Cost per Equivalent Units | $ 5.73 | $ 11.25 | $ 16.98 |