Question

0/12.5 pts Question 4 Four Seasons Company makes snow blowers. 100% of the materials are added at the beginning of the process. This means that beginning and ending inventories are 100% complete with respect to DM. The conversion costs are uniformly incurred. The physical units in beginning inventory are 80% complete with respect to conversion costs and the ending inventory is 10% complete with respect to conversion costs. Other data for the month include: Beginning WIP inventory 210 units Units transferred out 250 units Units in ending inv. 170 units Beginning work-in-process costs: Materials $127.000 Conversion $129,000 The DM cost/eu was determined to be $850. The CC cost/eu was determined to be $1040 Using FIFO, how much conversion cost is assigned to units transferred out? You Answered 260,000 Correct Answer 214,280 margin of error -0.1

Answer 1

FIFO method states that units produced first will be sold first

Equivalent completed units in beginning inventory with regard to conversion costs = 210 units*80% = 168 units

Units transferred = 250

Equivalent units converted during the year = 250-168 = 82 units

Conversion costs as per FIFO = Costs in beginning Inventory + Incurred during the year

= 129000 + 82*1040

= $214,280

Hence, the answer is $214,280