Question

Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:

Units in beginning inventory	390
Units started into production	4,290
Units in ending inventory	340
Units transferred to the next department	4,340

	Materials		Conversion
Percentage completion of beginning inventory	80	%	20	%
Percentage completion of ending inventory	70	%	30	%

The cost of beginning inventory according to the company’s costing system was $7,833 of which $4,865 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $177,160. The costs per equivalent unit for the month were:

	Materials	Conversion
Cost per equivalent unit	$18.00	$23.00

Required:

1. Compute the total cost per equivalent unit for the month.

2. Compute the equivalent units of material and conversion in the ending inventory.

3. Compute the equivalent units of material and conversion that were required to complete the beginning inventory.

4. Compute the number of units started and completed during the month.

5. Compute the cost of ending work in process inventory for materials, conversion, and in total for the month.

6. Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.

4,5,6 are willing to fixed, thx

Answer 1

Solution 1:

Total cost per equivalent unit = Material cost per equivalent unit + conversion cost per equivalent unit

= $18 + $23 = $41

Solution 2, 3 & 4:

Jarvene Corporation
Process Department
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	390
Units started this period	4290
Total unit to be accounted for	4680
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 20% Conversion - 80%	390	78	312
Started and completed currently	3950	3950	3950
Units in ending WIP Material - 70% Conversion - 30%	340	238	102
Total units accounted for	4680	4266	4364

From above table:

2. Equivalent unit of materia and conversion in ending inventory:

Material = 238 units

Conversion = 102 units

3. Equivalent units of material and conversion that were required to complete the beginning inventory:

Material = 78 units

Conversion = 312 units

4. Number of units started and completed during the month = 3950 units

Solution 5 and 6:

Current cost of material = Equivalent units * equivalent cost per unit = 4266*18 = $76,788

Current cost of conversion = 4364 *23 = $100,372

Jarvene Corporation
Process Department
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$7,833	$4,865	$2,968
Current cost added to complete beginning WIP:
Material (78*$18)	$1,404	$1,404
Conversion (312 * $23)	$7,176		$7,176
Total Cost from beginning inventory	$16,413	$6,269	$10,144
Current cost of unit started and completed:
Material (3950*$18)	$71,100	$71,100
Conversion (3950*$23)	$90,850		$90,850
Total cost of unit started and completed	$161,950	$71,100	$90,850
Total cost of unit transferred out	$178,363	$77,369	$100,994
Cost assigned to ending WIP:
Material (238*$18)	$4,284	$4,284
Conversion (102*$23)	$2,346		$2,346
Total ending WIP inventory	$6,630	$4,284	$2,346
Total cost accounted for	$184,993	$81,653	$103,340

From above table:

5. Cost of ending WIP:

Material = $4,284

Conversion = $2,346

Total = $6,630

6. Cost of the units transferred to the next department for materials, conversion, and in total for the month:

Material = $77,369

Conversion = $100,994

Total = $178,363