Question

Tamar Co, manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 21,600 units, and transferred 22,200 units of product to the Assembly department. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100 %complete with respect to direct materials and 80 %complete with respect to conversion) in process at month-end. During the month, $496,800 of direct materials costs and $2,165,940 of conversion costs were charged to the Forming department. The following additional information is available for the Forming department.

- Beginning work in process consisted of 3,000 units that were 100 %complete with respect to direct materials and 40 %complete with respect to conversion.

- Of the 22,200 units transferred out, 3,000 were from beginning work in process. The remaining 19,200 were units started and completed during May.

Assume that Tamar uses the FIFO method to account for its process costing system.

1. Prepare the Forming department's process cost summary for May using the FIFO method

Answer 1

Solution:

m + FIFO Total costs to account for Total Cost of Beginning Work in process Total Costs incurred this period Total Cost to account for Total Cost Accounted for * Difference due to rounding cost/unit Unit Reconciliation Units to account for: Units in Beginning work in process Units Started this period Total Units to account for Total units Accounted for: $241,740 $2,662,740 $2,904,480 $2,904,480 $0 3000 21600 24600 16 17 Units Completed and transferre out Units in ending work in process Total Units accounted for Equivalent units of production (EUP) - FIFO method 22200 2400 246001 19 20 22 Beginning units completed this period Units Started and Completed units of Ending work in process Equivalent units of production Units 3000 19200 2400 %Material EUP-Material % Conversion EUP- Conversion 0% 60% 1800 100% 19200 100% 19200 100% 2400 80% 1920 21600 22920 24 25 20 Sheet146 (9) Sheet567 Sheet194 (5) Sheet568 Sheet569 Sheet566 Sheet571 ST 11 0 <.

וושוLCL-שוק יש כווווu פופוuוצפן УИ 26 27 28 Costs EUP Material $496,800 Costs 21600 EUP $23.00 Conversion $2,165,92 22920 $94.50 29 30 31 $241,740 33 34 EUP Cost per EUP 0 $23.00 1800 $94.50 Total Cost $0 $170,100 Cost per EUP Costs incurred this period (Total Costs) /Equivalent units of Production Cost per Equivalent unit of Production Cost Assignment and Reconciliation Beginning Inventory Cost: Cost to Complete Beginning Inventory Direct materials Conversion Total Cost to complete Beginning Inventory Total Costs of units in Beginning Inventory Cost of units started and completed Direct Material Conversion Total Cost of units started and completed Total cost of units transferred out Cost of ending work in process Direct Material Conversion Total Ending work in process Total Costs accounted for $170,100 $411,840 36 37 EUP Cost per EUP 19200 $23.00 19200 $94.50 Total Cost $441,600 $1,814,400 40 $2,256,000 $2,667,840 41 43 EUP Cost per EUP 2400 $23.00 1920 $94.50 Total Cost $55,200 $181,440 45 $236,640 $2,904,480 46 48 10 Sheet146 (9) Sheet567 Sheet194 (5) Sheet568 Sheet569 Sheet566 ) Sheet571 SH