Question

Dengo Co. makes a trail mix in two departments: roasting and blending. Direct materials are added at the beginning of each process, and conversion costs are added evenly throughout each process. The company uses the FIFO method of process costing. During October, the roasting department completed and transferred 23,600 units to the blending department. Of the units completed, 3,700 were from beginning inventory and the remaining 19,900 were started and completed during the month. Beginning work in process was 100% complete with respect to direct materials and 30% complete with respect to conversion. The company has 3,100 units (100% complete with respect to direct materials and 70% complete with respect to conversion) in process at month-end. Information on the roasting department’s costs of beginning work in process inventory and costs added during the month follows.

Cost	Direct Materials			Conversion
Of beginning work in process inventory	$	10,600		$	112,230
Added during the month		280,600			1,131,894

Answer 1

• All working forms part of the answer
• Follow the give steps:

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	3,700	100%	30%	0%	70%
Units introduced	23,000
Total units to be accounted for	26,700
Completed and Transferred unit	23,600	0%	0%	100%	100%
Ending WIP	3,100	0%	0%	100%	70%
STEP 2
Equivalent Units
	Total Units	Materials		Conversion Cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	3,700	0%	-	70%	2,590
From units started	19,900	100%	19,900	100%	19,900
Total	23,600		19,900		22,490
	Total Units	Materials		Conversion Cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	3,100	100%	3,100	70%	2,170
Total EUP	26,700		23,000		24,660
STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Materials		Conversion Cost		TOTAL
Cost incurred in Current Period	$                                     280,600.00		$                                  1,131,894.00		$        1,412,494.00
Total Equivalent Units	23,000.00		24,660.00
Cost per Equivalent Units	$                                               12.20		$                                                 45.90
Cost of Beginning WIP	$                                       10,600.00		$                                      112,230.00		$            122,830.00
Total cost to be accounted for					$        1,535,324.00
STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		23,600.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	Materials	19,900	$            12.20	$         242,780.00
B	Conversion Costs	22,490	$            45.90	$      1,032,291.00
C=A+B	Total			$      1,275,071.00
D	Cost of Beginning WIP			$         122,830.00
E=C+D	Total Cost of Units transferred				$        1,397,901.00
	Cost of	Ending WIP		3,100.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Materials	3,100	$            12.20	$            37,820.00
G	Conversion Costs	2,170	$            45.90	$            99,603.00
H = F + G	Total Cost of Ending WIP				$            137,423.00
I = E + H	Total Cost accounted for				$        1,535,324.00
J	Rounding Off Differences				$                              -
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]				$        1,535,324.00

• Report

Production Report
For the Month (FIFO Method)
Unit Information
Physical flow:
Units to account for:	Units
Units in beginning WIP	3,700
Units started	23,000
Total units to account for	26,700
Units to account for:	Units
Units started and completed	19,900
From beginning WIP	3,700
Units in ending WIP	3,100
Total units to account for	26,700
Equivalent units:	Units
Started and completed	19,900
To complete beginning WIP	-
Units in ending WIP	3,100
Total equivalent units	23,000
Cost Information
Costs to account for:	Dollars
Costs in beginning WIP	$                122,830.00
Costs added by department	$            1,412,494.00
Total costs to account for	$            1,535,324.00
Costs accounted for:	Total
Transferred out:
Units started and completed	$            1,156,190.00
Units in beginning work in process:
From prior period	$                122,830.00
From current period	$                118,881.00
Total cost transferred out	$            1,397,901.00
Goods in ending work in process	$                137,423.00
Total costs accounted for	$            1,535,324.00