Question

Part 2: Process Costing Future Robotics provides the following information for one of its department’s operations for June (no new material is added in Department A):

WIP inventory -- Department A

Beginning inventory (20,000 units, 55% complete with respect to Department A costs)

Transferred-in costs (from Department Z) $110,000

Department A conversion costs 54,000

Current work (30,000 units started)

Prior department costs 275,000

Department A costs 210,000

The ending inventory has 4,000 units, which are 30 percent complete with respect to Department A costs and 100 percent complete for prior department costs.

Complete the following:

a. Prepare a production cost report using FIFO.

Answer 1

Statement of Equivalent Units
						Equivalent Units
Particulars		Units	Particulars		Units	Transferred In		Department A Cost
Beginning WIP		20000	Units Completed:
Units Started		30000	From Beginning WIP		20000	0		45%	9000
			From Current Prod.		26000	100%	26000	100%	26000
			Ending WIP		4000	100%	4000	30%	1200
							30000		36200

Computing cost per equivalent units
		Costs	Units	Cost per Eq. Units
Transferred In		$ 275,000.00	30000	$      9.17
Department A Cost		$ 210,000.00	36200	$      5.80

Cost of Goods Completed
Prior period cost (of 20000 units)			$ 164,000.00	($ 110000 + 54000)
Current period cost
Department A Cost			$   52,209.94	(9000 x $ 5.80)
Cost of 26000 units
Transferred In			$ 238,333.33	(26000 x $ 9.17)
Department A Cost			$ 150,828.73	(26000 x $ 5.80)
			$ 389,162.06
Cost of goods completed			$ 605,372.01	(A)

Cost of Ending WIP
Transferred In			$   36,666.67	(4000 x $ 9.17)
Department A Cost			$     6,961.33	(1200 x $ 5.80)
			$   43,627.99	(B)

Total cost accounted for

$ 649,000.00

(A+B)