Question

Exercise 8-41 (Static) Prepare a Production Cost Report: FIFO Method (LO 8-2, 4, 5)

Lansing, Inc. provides the following information for one of its department’s operations for June (no new material is added in Department T).

WIP inventory—Department T
Beginning inventory (15,000 units, 60% complete with respect to Department T costs)
Transferred-in costs (from Department S)	$	116,000
Department T conversion costs		53,150
Current work (35,000 units started)
Prior department costs		280,000
Department T costs		209,050

The ending inventory has 5,000 units, which are 20 percent complete with respect to Department T costs and 100 percent complete for prior department costs.

Required:

Complete the production cost report using FIFO. (Round "Cost per equivalent unit" to 2 decimal places.)

Equivalent Units Physical Units Prior Department Department T Flow of units: Units to be accounted for: Beginning WIP inventory Units started this period Total units to account for 0 Units accounted for: Completed and transferred out From beginning WIP inventory Prior department Department T Started and completed currently Units in ending WIP inventory Prior department Department T Total units accounted for 0 0 0 Total Prior Department Department T Flow of costs: Costs to be accounted for: Costs in beginning WIP inventory Current period costs Total costs to be accounted for $0 $0 $0 Cost per equivalent unit Prior department Department T Costs accounted for: Costs assigned to units transferred out: Costs from beginning WIP inventory Current costs added to complete beginning WIP inventory Prior department Department T Current costs of units started and completed: Prior department Department T Total costs transferred out $0 $0 $0 Cost of ending WIP inventory Prior department Department T Total costs accounted for $0 $0 $0

Answer 1

Answer

• FIFO

	Physical Units	Prior Department	Department T
Flow of Units:
Units to be accounted for:
Beginning WIP inventory	15,000
Units started this period	35,000
Total Units to account for	50,000
Units accounted for:
Completed & Transferred out
From Beginning WIP Inventory	15,000
Prior Department		-
Department T			6,000 [15000 x 40%]
Started & Completed currently	30,000	30,000	30,000
Units in Ending WIP Inventory	5,000
Prior Department		5,000
Department T			1,000 [5000 x 20%]
Total units accounted for	50,000	35,000	37,000
	TOTAL	Prior Department	Department T
Flow of Costs:
Cost of be accounted for:
Costs in beginning WIP Inventory	$                     169,150.00	$                 116,000.00	$          53,150.00
Current Period Costs	$                     489,050.00	$                280,000.00	$       209,050.00
Total Cost to be accounted for	$                     658,200.00	$                 396,000.00	$       262,200.00
Cost per Equivalent units
Prior Department		$                              8.00
Department T			$                    5.65
Costs accounted for:
Costs assigned to units transferred out:
Costs from beginning WIP Inventory	$                     169,150.00	$                 116,000.00	$          53,150.00
Current Costs added to complete beginning WIP Inventory	$                       33,900.00
Prior Department		$                                   -
Department T			$          33,900.00
Current Costs of units started and completed:	$                     409,500.00
Prior Department		$                 240,000.00
Department T			$       169,500.00
Total cost transferred out	$                     612,550.00	$                 356,000.00	$       256,550.00
Cost of ending WIP Inventory	$                       45,650.00
Prior Department		$                   40,000.00
Department T			$            5,650.00
Total costs accounted for	$                     658,200.00	$                 396,000.00	$       262,200.00