Question

Mullins Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:

Beginning work in process inventory:
Units in beginning work in process inventory		900
Materials costs	$	11,900
Conversion costs	$	22,400
Percent complete with respect to materials		75	%
Percent complete with respect to conversion		65	%
Units started into production during the month		9,000
Units transferred to the next department during the month		8,200
Materials costs added during the month	$	163,300
Conversion costs added during the month	$	352,500
Ending work in process inventory:
Units in ending work in process inventory		1,700
Percent complete with respect to materials		65	%
Percent complete with respect to conversion		50	%

The cost of ending work in process inventory in the first processing department according to the company’s cost system is closest to: (Round equivalent units to the nearest whole number and round all other intermediate calculations to 3 decimal places.)

Answer 1

Ending work in process= $56,305

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	900	75%	65%	25%	35%
Units introduced	9,000
Total units to be accounted for	9,900
Completed and Transferred unit	8,200	0%	0%	100%	100%
Ending WIP	1,700	0%	0%	65%	50%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	900	25%	225	35%	315
From units started/Introduced	7,300	100%	7,300	100%	7,300
Total	8,200		7,525		7,615
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	1,700	65%	1,105	50%	850
Total EUP	9,900		8,630		8,465

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion cost		TOTAL
Cost incurred in Current Period	$ 163,300		$ 352,500		$ 515,800
Total Equivalent Units	8,630		8,465
Cost per Equivalent Units	$ 18.92		$ 41.64		$ 60.56
Cost of Beginning WIP					$ 34,300
Total cost to be accounted for					$ 550,100

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		8,200.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	225	$ 18.922	$ 4,257
	Conversion cost	315	$ 41.642	$ 13,117	$ 17,375
B	From units started & completed
	Material	7,300	$ 18.922	$ 138,131
	Conversion cost	7,300	$ 41.642	$ 303,987	$ 442,117
C=A+B	Total				$ 459,492
D	Cost of Beginning WIP				$ 34,300
E=C+D	Total Cost of Units transferred				$ 493,792
	Cost of	Ending WIP		1,700.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Material	1,105	$ 18.922	$ 20,909
G	Conversion cost	850	$ 41.642	$ 35,396
H = F + G	Total Cost of Ending WIP				$ 56,305
I = E + H	Total Cost accounted for				$ 550,096
J	Rounding Off Differences				$ 4
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]				$ 550,100