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.

• 239 units in beginning WIP (35% complete with respect to conversion costs).
• 10,418 units started
• 193 units in ending WIP (71% complete with respect to conversion costs).
• $21 direct material cost per equivalent unit
• $12 conversion cost per equivalent unit

What is the department's total cost of ending WIP for this month (round final answer to nearest cent if necessary)?

Please explain how you found this this answer

Answer 1

Answer-------------Department's total cost of ending WIP for this month= $5,697.36

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	239	100%	35%	0%	65%
Units introduced	10,418
Total units to be accounted for	10,657
Completed and Transferred unit	10,464	0%	0%	100%	100%
Ending WIP	193	0%	0%	100%	71%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	239	0%	-	65%	155
From units started/Introduced	10,225	100%	10,225	100%	10,225
Total	10,464		10,225		10,380
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	193	100%	193	71%	137
Total EUP	10,657		10,418		10,517

.

Cost of	Ending WIP		193.00	units
	Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
Material	193	$ 21.00	$ 4,053
Conversion cost	137	$ 12.00	$ 1,644
Total Cost of Ending WIP				$ 5,697