Question

Montreal Manufacturing Inc. has the following cost and production data for the month of April. Beginning WIP Started in production Completed production Ending WIP 16,900 units 101,500 90,400 28,000 The beginning inventory was 60% complete for conversion costs. The ending inventory was 40% complete for conversion costs. Materials are added at the beginning of the process Costs pertaining to the month of April are as follows: $63,600 21,600 16,800 Beginning inventory costs are: Materials Direct labour Factory overhead Costs incurred during April include: Materials Direct labour Factory overhead $578,550 193,700 373,352 Calculate the equivalent units of production for materials and conversion costs for the month of April using the first-in, first-out (FIFO) method. Materials Conversion costs Total equivalent units Calculate the unit costs for the month. (Round unit cost to 3 decimal places, e.g. 15.256.) Unit costs

Answer 1

Solution:

Monteral manufacturing inc.
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	16900
Units started this period	101500
Total unit to be accounted for	118400
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 40%	16900	0	6760
Started and completed currently	73500	73500	73500
Transferred to finished goods	90400	73500	80260
Units in ending WIP Material - 100% Conversion - 40%	28000	28000	11200
Total units accounted for	118400	101500	91460

Monteral manufacturing inc.
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$1,145,602.00	$578,550.00	$567,052.00
Equivalent units		101500	91460
Cost per equivalent unit		$5.70	$6.20

Monteral manufacturing inc.
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$102,000	$63,600	$38,400
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (6760 * $6.20)	$41,912		$41,912
Total Cost from beginning inventory	$143,912	$63,600	$80,312
Current cost of unit started and completed:
Material (73500*$5.70)	$418,950	$418,950
Conversion (73500*6.20)	$455,700		$455,700
Total cost of unit started and completed	$874,650	$418,950	$455,700
Total cost of unit transferred out	$1,018,562	$482,550	$536,012
Cost assigned to ending WIP:
Material (28000*$5.70)	$159,600	$159,600
Conversion (11200*6.20)	$69,440		$69,440
Total ending WIP inventory	$229,040	$159,600	$69,440
Total cost accounted for	$1,247,602	$642,150	$605,452