Question

During April, the first production department of a process manufacturing system completed its work on 355,000 units of a product and transferred them to the next department. Of these transferred units, 71,000 were in process in the production department at the beginning of April and 284,000 were started and completed in April. April's beginning inventory units were 65% complete with respect to materials and 35% complete with respect to conversion. At the end of April, 93,000 additional units were in process in the production department and were 90% complete with respect to materials and 40% complete with respect to conversion. The production department had $1,106,991 of direct materials and $800,823 of conversion costs charged to it during April. Also, its beginning inventory of $207,646 consists of $165,239 of direct materials cost and $42,407 of conversion costs. 1. Compute the direct materials cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.) 2. Compute the conversion cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.) 3. Using the FIFO method, assign April's costs to the department's output-specifically, its units transferred to the next department and its ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

Solution:

FIFO
Cost Charged to production
Total Cost of Beginning Work in process	$207,646
Total Costs incurred this period	$1,907,814
Total Cost to account for	$2,115,460
Total Cost Accounted for	$2,115,460
*Difference due to rounding cost/unit	$0
Unit Reconciliation
Units to account for:
Units in Beginning work in process	71000
Units Started this period	377000
Total Units to account for	448000
Total units Accounted for:
Units in Beginning work in process completed	71000
Units Started and Completed	284000
Units in ending work in process	93000
Total Units accounted for	448000
Equivalent units of production (EUP) - FIFO method
	Units	%Material	EUP-Material	% Conversion	EUP- Conversion
Beginning units completed this period (A)	71000	35%	24850	65%	46150
Units Started and Completed (450000-100000) (B)	284000	100%	284000	100%	284000
units of Ending work in process (D)	93000	90%	83700	40%	37200
Equivalent units of production (C+D)			392550		367350
Cost per EUP			Material		Conversion
Costs incurred this period (Total Costs)		Costs	$1,106,991	Costs	$800,823
/Equivalent units of Production		EUP	392550	EUP	367350
Cost per Equivalent unit of Production			$2.82		$2.18
Cost Assignment and Reconciliation
Beginning Inventory Cost:				$207,646
Cost to Complete Beginning Inventory	EUP	Cost per EUP	Total Cost
Direct materials	24850	$2.82	$70,077
Conversion	46150	$2.18	$100,607
Total Cost to complete Beginning Inventory				$170,684
Total Costs of units in Beginning Inventory				$378,330
Cost of units started and completed	EUP	Cost per EUP	Total Cost
Direct Material	284000	$2.82	$800,880
Conversion	284000	$2.18	$619,120
Total Cost of units started and completed				$1,420,000
Total cost of units transferred out				$1,798,330
Cost of ending work in process	EUP	Cost per EUP	Total Cost
Direct Material	83700	$2.82	$236,034
Conversion	37200	$2.18	$81,096
Total Ending work in process				$317,130
Total Costs accounted for				$2,115,460