Question

A department uses the FIFO method of process costing. All direct materials are added at the beginning of the process. This department has the following data for this month.

• 205 units in beginning WIP (57% complete with respect to conversion costs).
• 9,327 units started
• 206 units in ending WIP (34% complete with respect to conversion costs).
• $13 direct material cost per equivalent unit
• $12 conversion cost per equivalent unit
• $1,748 beginning WIP direct materials costs
• $4,010 beginning WIP conversion costs

What is the department's total cost of units completed and transferred out (round final answer to nearest cent if necessary)?

Please explain

Answer 1

Answer----------------Department's total cost of units completed and transferred out= $234,840.80

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	205	100%	57%	0%	43%
Units introduced	9,327
Total units to be accounted for	9,532
Completed and Transferred unit	9,326	0%	0%	100%	100%
Ending WIP	206	0%	0%	100%	34%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	205	0%	-	43%	88
From units started/Introduced	9,121	100%	9,121	100%	9,121
Total	9,326		9,121		9,209
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	206	100%	206	34%	70
Total EUP	9,532		9,327		9,279

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion cost		TOTAL
Cost incurred in Current Period	$ 121,251		$ 111,350		$ 232,601
Total Equivalent Units	9,327		9,279
Cost per Equivalent Units	$ 13.00		$ 12.00		$ 25.00
Cost of Beginning WIP	$ 1,748		$ 4,010		$ 5,758
Total cost to be accounted for					$ 238,359

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		9,326.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	-	$ 13.00	$ 0
	Conversion cost	88	$ 12.00	$ 1,058	$ 1,058
B	From units started & completed
	Material	9,121	$ 13.00	$ 118,573
	Conversion cost	9,121	$ 12.00	$ 109,452	$ 228,025
C=A+B	Total				$ 229,083
D	Cost of Beginning WIP				$ 5,758
E=C+D	Total Cost of Units transferred				$           234,840.80