Question

IN manutes ress. Cons of pros and Problem 16-5AA FIFO: Process cost summary, equivalent units; cost estimates LO C3, C4, P4 (The following information applies to the questions displayed below) Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 22,200 units of product to finished goods inventory. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $496,800 of direct material costs and $2,165,940 of conversion costs were charged to production • Beginning work in process consisted of 3,000 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion Of the 22,200 units completed, 3.000 were from beginning work in process. The remaining 19,200 were units started and completed during May Assume that Tomar uses the FIFO method to account for its process costing system. Problem 16-5A Part 2 2. Prepare the journal entry dated May 31 to transfer the cost of completed units to finished goods inventory

Answer 1

Answer

• Requirement 2

	Accounts title	Debit	Credit
May-31	Finished Goods Inventory	$    2,667,840.00
	Work In Process Inventory		$         2,667,840.00

--Working for above

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	2,400	100.0%	2,400	80.0%	1,920
Units STARTED & COMPLETED	19,200	100%	19,200	100%	19,200
Units of beginning WIP	3,000	0.00%	-	60%	1,800
Equivalent Units of Production			21,600		22,920
COST per EUP			Material		Conversion
Cost incurred this period			$       496,800.00		$              2,165,940.00
Total Costs		Costs	$       496,800.00	Costs	$              2,165,940.00
Equivalent units of production		EUP	21,600	EUP	22,920
Cost per EUP			$           23.00000		$                        94.5000

Cost Transferred out:	EUP	Cost per EUP	Total Cost
Cost of Beginning WIP			241,740.00
Cost to complete beginning WIP-
- Direct Materials	-	23.00	-
- Conversion	1,800.00	94.50	170,100.00
Total cost to complete beginning WIP			411,840.00
Cost of Units started & completed this period:	EUP	Cost per EUP	Total Cost
- Direct Materials	19,200.00	23.00	441,600.00
- Conversion	19,200.00	94.50	1,814,400.00
Total costs started & Completed this period			2,256,000.00
Total cost of work finished this period				2,667,840.00 [USED IN JOURNAL ENTRY]