Question

Assume:

BB WIP, 40% complete 10,000 units
Started 100,000
EB WIP, 60% complete 12,000 Costs

Beginning WIP:

DM $30,000
Conversion Costs $6,000
Materials used during the period $220,000
Conversion costs incurred during the period $150,000

Using a FIFO basis, what is the value of

a) goods transferred out

b) ending WIP?

Answer 1

Particulars	Direct Materials				Conversion				Total Cost
	Units	% completion	Equivalent Units	Cost	Units	% completion	Equivalent Units	Cost
Begining Work in Process inventory	10,000	40%	4,000	30,000	10,000	40%	4,000	6,000	36,000
Processed During theperiod:
Units Started	1,00,000
Begining Work in Process inventory	10,000	60%	6,000	13,043	10,000	60%	6,000	8,893	21,937
				(220000/101200X6000)				(150000/101200X6000)
Units Started & Completed in current period	88,000	100%	88,000	1,91,304	88,000	100%	88,000	1,30,435	3,21,739
				(220000/101200X88000)				(150000/101200X88000)
Units Started & not Complete in current period	12,000	60%	7,200	15,652	12,000	60%	7,200	10,672	26,324
				(220000/101200X7200)				(150000/101200X7200)
Total Equivalent Units for the period			1,01,200	2,20,000			1,01,200	1,50,000
Assuming that Materials introduced in proportion to Completion
Requirement a
Value of goods transferred out of 98000 units	3,79,676	(21937+321739+36000)
Value of goods ending Inventorty of 12000 units	26,324