Question

Tabet Corporation uses the FIFO method in its process costing system. Operating data for the Curing Department for the month of March appear below:

	Units	Percent Complete with Respect to Conversion
Beginning work in process inventory	5,800	70	%
Transferred in from the prior department during March	57,100
Completed and transferred to the next department during March	58,800
Ending work in process inventory	4,100	90	%

According to the company’s records, the conversion cost in beginning work in process inventory was $20,449 at the beginning of March. The cost per equivalent unit for conversion costs for March was $5.10. How much conversion cost would be assigned to the units completed and transferred out of the department during March?

• $279,174

• $299,623

• $290,300

• $299,224

Answer 1

Correct answer-----------$299,623

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
			Conversion cost		Conversion cost
Beginning WIP	5,800		70%		30%
Units introduced	57,100
Total units to be accounted for	62,900
Completed and Transferred unit	58,800		0%		100%
Ending WIP	4,100		0%		90%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units			Conversion cost
Units Transferred:				% completed this period	Equivalent Units
From WIP	5,800			30%	1,740
From units started/Introduced	53,000			100%	53,000
Total	58,800				54,740
	Total Units			Conversion cost
Ending WIP				% completed this period	Equivalent Units
Total	4,100			90%	3,690
Total EUP	62,900				58,430

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
			Conversion cost		TOTAL
Cost incurred in Current Period			$ 297,993		$ 297,993
Total Equivalent Units			58,430
Cost per Equivalent Units			$ 5.10		$ 5.10
Cost of Beginning WIP					$ 20,449
Total cost to be accounted for					$ 318,442

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		58,800.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	-	$ 0.00	$ 0
	Conversion cost	1,740	$ 5.10	$ 8,874	$ 8,874
B	From units started & completed
	Material	53,000	$ 0.00	$ 0
	Conversion cost	53,000	$ 5.10	$ 270,300	$ 270,300
C=A+B	Total				$ 279,174
D	Cost of Beginning WIP				$ 20,449
E=C+D	Total Cost of Units transferred				$ 299,623