Question

Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing process. The company has provided the following information: Costs Units 80,000 $ 80,000 190,000 $ 270,000 152,000 Beginning work in process (301 complete) Direct materials Conversion cost Total cost of beginning work in process Number of units started Number of units completed and transferred to finished goods Ending work in process (508 complete) Current period costs Direct materials Conversion cost Total current period costs 68,000 $180,000 314,000 $494,000 Required: 1 & 2. Using FIFO method of process costing, complete each of the following steps: a. Reconcile the number of physical units worked on during the period, Answer is complete and correct. Physical Physical Units Beginning Units 80,000 164,000 152.000 Completed Ending Units Total Units 68,000 Started Total Units 232,000 232,000

Answer 1

Answers

• [b]

	Physical Units	Direct Material - Equivalent unit	Conversion - Equivalnet unit
Beginning Inventory	80,000	-	56,000
Started and completed	84,000	84,000	84,000
Ending Inventory	68,000	68,000	34,000
Total	232,000	152,000	174,000

--Working

	=+C55918	Direct Material - Equivalent unit	Conversion - Equivalnet unit
Beginning Inventory	80000	0	=80000*70%
Started and completed	=164000-80000	=84000*100%	=84000*100%
Ending Inventory	68000	=68000*100%	=68000*50%

• [c]

	Direct materials	Conversion
Cost per EU	$                  1.18421	$                               1.80460
	[($180000 / 152000)]	[($314000 / 174000)]

• [d]

	Prior Period	Direct materials	Conversion	Total Cost
Beginning Inventory	$270,000	$0	$101,058	$371,058
Started and completed	$0	$99,474	$151,586	$251,060
Ending Inventory	$0	$80,526	$61,356	$141,883
Total Cost accounted for	$270,000	$180,000	$314,000	$764,000

--Working

	Prior Period	Direct materials	Conversion
Beginning Inventory	270000	=1.9*0	=56000*1.8046
Started and completed	0	=84000*1.18421	=84000*1.8046
Ending Inventory	0	=68000*1.18421	=34000*1.8046