Question

View Help Open in Desktop App I U OV A A. Question 4 (14 Marks) S Tell me what you want to do Sv 1 2 .. Normal Johnstone Brewers Inc, uses the FIFO method in its process costing system. The followin data concern the operations of the company's first processing department for a recent mor Work in process, beginning Units in process Stage of completion with respect to materials Stage of completion with respect to conversion Costs in the beginning inventory Materials cost Conversion cost 300 60% 80% $594 $8.256 Units started into production during the month Unts completed and transferred out 26.000 25,500 Costs added to production during the month Materials cost Conversion cost $79,732 $887624 Work in process ending Units in process Stage of completion with respect to materiale Stage of completion with respect to conversion 50 409 Required: Using the FIFO method: a) Determine the equivalent units of production for materials and conversion costs. (4 Marks) b) Determine the cost per equivalent unit for materials and conversion costs. (4 Marks) c) Determine the cost of units transferred out of the department during the month marks d) Determine the cost of ending work-in-process inventory in the department. (2 Marks)

Answer 1

a)

To complete the beginning work in process:	Materials	Conversion
Materials (300 x 60%)	180.00
Conversion(300 x 80%)		240.00
Units started and completed (25,500 - 300)	25,200.00	25,200.00
Ending work in process:
Materials (800 x   50%)	400.00
Conversion (800 x 40%)		320.00
Equivalent Units of Production	25,780.00	25,760.00

b)

	Materials	Conversion
Cost Added During the Month	79,732.00	887,626.00
Equivalent units of Production	25,780.00	25,760.00
Cost per Equivalent unit	3.09	34.46

c)

	Materials	Conversion	Total
Ending work in process:
Equivalent units of production	400.00	320.00
Cost per equivalent unit	3.09	34.46
Cost of ending work in process	1,236.00	11,027.20	12,263.20

d)

	Materials	Conversion	Total
Cost from the beginning inventory	594.00	8,256.00	8,850.00
Cost to complete the units in beginning inventory:
Equivalent units to complete	180.00	240.00
Cost per equivalent unit	3.09	34.46
Cost to complete	556.20	8,270.40	8,826.60
Cost of units started and completed:
Units started and completed	25,200.00	25,200.00
Cost per equivalent unit	3.09	34.46
Cost of units started and completed	77,868.00	868,392.00	946,260.00
Total cost of units transferred out			955,086.60