Question

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 67,000 were in process in the production department at the beginning of April and 268,000 were started and completed in April. April's beginning inventory units were 70% complete with respect to materials and 30% complete with respect to conversion. At the end of April, 89,000 additional units were in process in the production department and were 85% complete with respect to materials and 35% complete with respect to conversion.

Part 1. Compute the number of units transferred to finished goods.

Part 2. Compute the number of equivalent units with respect to both materials used and conversion used in the production department for April using the weighted-average method.

Part 3. The production department had $960,300 of direct materials and $768,231 of conversion costs charged to it during April. Also, its beginning inventory of $185,754 consists of $148,455 of direct materials cost and $37,299 of conversion costs.
  Using the weighted-average method, compute the direct materials cost and the conversion cost per equivalent unit and assign April's costs to the department’s output.

Part 4. Prepare the number of equivalent units with respect to both materials used and conversion costs in the production department for April using the FIFO method.

Part 5. The production department had $960,300 of direct materials and $768,231 of conversion costs charged to it during April. Also, its beginning inventory of $185,754 consists of $148,455 of direct materials cost and $37,299 of conversion costs. Using the FIFO method, prepare the direct materials cost and the conversion cost per equivalent unit and assign April's costs to the department’s output.

Answer 1

Weighted average cost
Beggining units	67000	Transferred out	3,35,000
Started intro production	357000	Ending units	89,000
Units accounted for	424000		424000
Equivalent units	Material	Conversion cost
Units transferred                      A	335000	335000
Ending Units	89,000	89,000
Completion	85%	35%
B	75650	31150
Total units	410650	366150
Cost per equivalent units
Particulars	Material	Conversion cost	total
As at beginning	148455	37299	185754
Added during the month	960300	768231	1728531
Cost to be accounted for	1108755	805530	1914285
Total eqivalent units	410650	366150
Cost per equivalent unit	2.70	2.20	4.90
Cost per equivalent unit = Cost to be accounted for / Total equivalent units

	Cost of ending work in progress
			Conversion cost
	Particulars	Material		Total
	Ending units	89,000	89,000
	Cost per equivalent units	2.70	2.20
	Completion	85%	35%
	Total cost	204255	68530	272785
	Cost of goods transferred		Conversion cost
	Particulars	Material		Total
	Number of units	335000	335000
	Cost per equivalent units	2.70	2.20	4.90
	Total amount	904500	737000	1641500

FIFO method
Beggining units	67000	Transferred out	3,35,000
Started into production	357000	Ending units	89,000
	424000		424000
Equivalent units	Material	Conversion
Beginning units	67000	67000
Completion in current period	30%	70%
A	20100	46900
Units started and completed	268000	268000
Completion	100%	100%
B	268000	268000
Ending Units	89,000	89,000
Completion	85%	35%
C	75650	31150
Total units A+B+C	363750	346050
Cost per equivalent units
Per unit cost	Cost	Total units	Per unit cost
Material cost	960300	363750	2.64
Conversion cost	768231	346050	2.22
Total	1728531

Cost of goods sold	Material	convertion cost
Beginning work in progress A	148455	37299	185754
Beginning inventory completed
Completion	30%	70%
Per unit cost	2.64	2.22
Units	67000	67000
Total cost   B	53064	104118	157182
Units started and completed
Completion	100%	100%
Per unit cost	2.64	2.22
Units	268000	268000
Total cost    C	707520	594960	1302480
Total cost A+B+C	909039	699078	1645416
Ending work in progress
Completion	85%	35%
Per unit cost	2.64	2.22
Units	89,000	89,000
Total cost	199716	69153	268869