Question

(a) cost of goods completed during February (b) cost of the 28 February work in process inventory. Repeat requirement 1 using the FIFO method. 2 Weighted average cost and FIFO: manufacturer Sherida n Textiles Ltd manufactures natural fabrics for the clothing industry. The following data e to the Weaving Department for the month of September: ES27 21 relate ILO3] FIFO 40 Weighted average 60000 52000 Total equivalent units of direct material Total equivalent units of conversion Units completed and transferred out during 50000 50000 September The cost data for September were as follows Work in process 1 September Direct material $94000 44400 during Direct material $164000 272 800 There were 20000 units in process in the Weaving Department on 1 September (100 per cent complete as to direct material and 40 per cent complete as to conversion). Required: Calculate each of the following amounts using weighted average process costing: a) Cost of goods completed and transferred out of the Weaving Department during September. b) Cost of the 30 September work in process inventory in the Weaving Department. Repeat requirement 1 using the FIFO method. 2

Answer 1

Weighted average

Cost per equivalent units
Particulars	Material	Conversion cost	total
As at beginning	94000	44400	138400
Added during the month	164000	272800	436800
Cost to be accounted for	258000	317200	575200
Total eqivalent units	60000	52000
Cost per equivalent unit	4.30	6.10	10.40
Cost per equivalent unit = Cost to be accounted for / Total equivalent units

Cost of goods sold = 50000*10.40 = 520000

Work in process ending inventory = 575200-520000= 55200

FIFO

FIFO method
Beggining units	20000	Transferred out	50,000
Started into production	40000	Ending units	10,000
	60000		60000
Equivalent units	Material	Conversion
Beginning units	20000	20000
Completion in current period	0%	60%
A	0	12000
Units started and completed	30000	30000
Completion	100%	100%
B	30000	30000
Ending Units	10,000	10,000
Completion	100%	20%
C	10000	2000
Total units A+B+C	40000	44000
Cost per equivalent units
Per unit cost	Cost	Total units	Per unit cost
Material cost	164000	40000	4.10
Conversion cost	272800	44000	6.20
Total	436800

Cost of goods sold	Material	convertion cost
Beginning work in progress A	94000	44400	138400
Beginning inventory completed
Completion	0%	60%
Per unit cost	4.10	6.20
Units	20000	20000
Total cost   B	0	74400	74400
Units started and completed
Completion	100%	100%
Per unit cost	4.10	6.20
Units	30000	30000
Total cost    C	123000	186000	309000
Total cost A+B+C	217000	260400	521800
Ending work in progress
Completion	100%	20%
Per unit cost	4.10	6.20
Units	10,000	10,000
Total cost	41000	12400	53400
	Total cost accounted for		575200