Question

Betty DeRose, Inc. operates two departments, the handling department and
the packaging department. During April, the handling department reported
the following information:

                                           % complete      % complete
                                units         DM           conversion 
work in process, April 1        18,000        38%             71%
units started during April      80,000
work in process, April 30       44,000        28%             74%

The cost of beginning work in process and the costs added during April
were as follows:

                                 DM         Conversion       Total cost
work in process, April 1      $ 64,996       $152,785         $217,781
costs added during April       190,336        232,407          422,743
total costs                    255,332        385,192          640,524

Calculate the cost of goods completed and transferred out during April
using the FIFO process costing method.

Answer 1

Cost of goods completed and transferred out = $498,536

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	18,000	38%	71%	62%	29%
Units introduced	80,000
Total units to be accounted for	98,000
Completed and Transferred unit	54,000	0%	0%	100%	100%
Ending WIP	44,000	0%	0%	28%	74%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	18,000	62%	11,160	29%	5,220
From units started/Introduced	36,000	100%	36,000	100%	36,000
Total	54,000		47,160		41,220
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	44,000	28%	12,320	74%	32,560
Total EUP	98,000		59,480		73,780

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion cost		TOTAL
Cost incurred in Current Period	$ 190,336		$ 232,407		$ 422,743
Total Equivalent Units	59,480		73,780
Cost per Equivalent Units	$ 3.20		$ 3.15		$ 6.35
Cost of Beginning WIP					$ 217,781
Total cost to be accounted for					$ 640,524

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		54,000.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	11,160	$ 3.20	$ 35,712
	Conversion cost	5,220	$ 3.15	$ 16,443	$ 52,155
B	From units started & completed
	Material	36,000	$ 3.20	$ 115,200
	Conversion cost	36,000	$ 3.15	$ 113,400	$ 228,600
C=A+B	Total				$ 280,755
D	Cost of Beginning WIP				$ 217,781
E=C+D	Total Cost of Units transferred				$ 498,536
	Cost of	Ending WIP		44,000.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Material	12,320	$ 3.20	$ 39,424
G	Conversion cost	32,560	$ 3.15	$ 102,564
H = F + G	Total Cost of Ending WIP				$ 141988.0
I = E + H	Total Cost accounted for				$ 640,524