Question

1. Amazon Co. manufactures a product called AWOL in a three-process series. All materials are introduced at the beginning of the first process. Amazon uses the first-in, first-out method of inventory costing. Unit and cost data for the first process (Department A) for the month of March 2017 follow: Units Completion Cost 242,048 Conversion Work in process inventory: March 1 March 31 Direct materials cost Conversion cost Completed in March 29,000 21,000 40% 70% 474,880 175,005 62,000 (1) Prepare Amazon's Department A cost of production report for March. (2) Compare the February and March cost per equivalent unit for direct materials and conversion, given the March 1 beginning inventory cost of direct materials was $210,960.

Answer 1

Answer

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	21,000	100.0%	21,000	70.0%	14,700
Units STARTED & COMPLETED	33,000	100%	33,000	100%	33,000
Units of beginning WIP	29,000	0.00%	-	60%	17,400
Equivalent Units of Production			54,000		65,100
COST per EUP			Material		Conversion
Cost incurred this period			$       474,880.00		$                  175,005.00
Total Costs		Costs	$       474,880.00	Costs	$                  175,005.00
Equivalent units of production		EUP	54,000	EUP	65,100
Cost per EUP			$             8.79407		$                          2.6882
COST ASSIGNMENT & RECONCILIATION
Cost Transferred out:	EUP	Cost per EUP	Total Cost
Cost of Beginning WIP			242,048.00
Cost to complete beginning WIP-
- Direct Materials	-	8.79	-
- Conversion	17,400.00	2.69	46,806.00
Total cost to complete beginning WIP			288,854.00
Cost of Units started & completed this period:	EUP	Cost per EUP	Total Cost
- Direct Materials	33,000.00	8.79	290,070.00
- Conversion	33,000.00	2.69	88,770.00
Total costs started & Completed this period			378,840.00
Total cost of work finished this period				667,694.00
Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	21,000	$                              8.79	$       184,590.00
- Conversion	14,700	$                              2.69	$          39,543.00
Total cost of ending WIP				$             224,133.00
Total costs accounted for				$             891,827.00

Costs Charged to Production:
Cost of beginning WIP	$                     242,048.00
Costs incurred this period	$                     649,885.00
Total Cost to account for	$                     891,933.00
Total costs accounted for	$                     891,827.00
Difference due to rounding cost/unit	$                             106.00

Units Reconciliation
Units to account for:
Beginning WIP	29,000
Units started this period	54,000
Total Units to account for	83,000
Total Units accounted for:
Completed & Transferred out	62,000
Ending WIP	21,000
Total Units accounted for	83,000