Question

Yarmouth Company produces a liquid solvent in two departments: Mixing and Finishing. Accounting records at Yarmouth show the following information for Finishing operations for February (no new material is added in the Finishing Department):

WIP inventory—Finishing
Beginning inventory (10,700 units, 20% complete with respect to Finishing costs)
Transferred-in costs (from Mixing)	$	123,670
Finishing conversion costs		8,003
Current work (99,400 units started)
Mixing costs		944,300
Finishing costs		472,867

The ending inventory has 14,700 units, which are 50 percent complete with respect to Finishing Department costs and 100 percent complete for Mixing Department costs.

Required: a. Complete the production cost report using the FIFO method. (Round "Cost per equivalent unit" to 2 decimal places.) Physical Units Equivalent Units Mixing Finishing Department Department Flow of units: Units to be accounted for: Beginning WIP inventory Units started this period Total units to account for Units accounted for: Completed and transferred out From beginning WIP inventory Mixing Finishing Started and completed currently Units in ending WIP inventory Mixing Finishing Total units accounted for

Answer 1

Solution:

Yarmouth Company
Finishing Department
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Mixing	Finishing
Units to be accounted for:
Beginning WIP Inventory	10700
Units started this period	99400
Total unit to be accounted for	110100
Units Accounted for:
Units completed and transferred out
From beginning inventory Mixing - 0% Finishing - 80%	10700	0	8560
Started and completed currently	84700	84700	84700
Units in ending WIP Mixing - 100% Finishing - 50%	14700	14700	7350
Total units accounted for	110100	99400	100610

Yarmouth Company
Finishing Department
Computation of Cost per Equivalent unit
Particulars	Total cost	Mixing	Finishing
Current period cost	$1,417,167.00	$944,300.00	$472,867.00
Equivalent units		99400	100610
Cost per equivalent unit		$9.50	$4.70

Yarmouth Company
Finishing Department
Producton cost report - FIFO
Particulars	Total cost	Mixing	Finishing
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$131,673	$123,670	$8,003
Current cost added to complete beginning WIP:
Mixing	$0	$0
Finishing (8560*$4.70)	$40,232		$40,232
Total Cost from beginning inventory	$171,905	$123,670	$48,235
Current cost of unit started and completed:
Mixing (84700*$9.50)	$804,650	$804,650
Finishing (84700*$4.70)	$398,090		$398,090
Total cost of unit started and completed	$1,202,740	$804,650	$398,090
Total cost of unit transferred out	$1,374,645	$928,320	$446,325
Cost assigned to ending WIP:
Mixing (14700*$9.50)	$139,650	$139,650
Finishing (7350*$4.70)	$34,545		$34,545
Total ending WIP inventory	$174,195	$139,650	$34,545
Total cost accounted for	$1,548,840	$1,067,970	$480,870