Question

Required information Problem 16-5AA FIFO: Process cost summary; equivalent units; cost estimates LO C3, C4, P4 The following information applies to the questions displayed below) Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 33,200 units of product to finished goods inventory. Its 5,200 units of beginning work in process consisted of $113,790 of direct materials and $1,057,888 of conversion costs. It has 3.500 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $756,000 of direct material costs and $3,514,112 of conversion costs were charged to production • Beginning work in process consisted of 5,200 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion . Of the 33,200 units completed, 5,200 were from beginning work in process. The remaining 28,000 were units started and completed during May Assume that Tamar uses the FIFO method to account for its process costing system. Problem 16-5A Part 1 1. Prepare the company's process cost summary for May using the FIFO method. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

1.

Total costs to account for:
Costs of beginning work in process	1171678
Costs incurred this period	4270112
Total costs to account for:	5441790
Total costs accounted for	5441790
Difference due to rounding cost/unit	0
Unit reconciliation:
Units to account for:
Beginning work in process inventory - units	5200
Units started this period	31500
Total units to account for	36700
Total units accounted for:
Units completed and transferred out	33200
Ending work in process - units	3500
Total units accounted for	36700
Equivalent units of production (EUP) - FIFO method
	Units	% Materials	EUP-Materials	% Conversion	EUP-Conversion
Beginning work in process inventory	5200	0%	0	60%	3120
Started and completed	28000	100%	28000	100%	28000
Ending work in process	3500	100%	3500	80%	2800
Total units			31500		33920
Cost per equivalent unit of production			Materials		Conversion
Costs incurred this period			756000		3514112
Total costs		Costs	756000	Costs	3514112
÷ Equivalent units of production		EUP	31500	EUP	33920
Cost per equivalent unit of production (rounded to 2 decimals)			24.00		103.60
Total costs accounted for:
Beginning inventory cost:				1171678
Cost to complete beginning inventory	EUP	Cost per EUP	Total cost
Direct materials	0	24.00	0
Conversion	3120	103.60	323232
Total cost to complete beginning inventory				323232
Total cost of units in beginning inventory				1494910
Cost of units started and completed
Direct materials	28000	24.00	672000
Conversion	28000	103.60	2900800
Total cost of units started and completed				3572800
Total cost of units transferred out				5067710
Costs of ending work in process	EUP	Cost per EUP	Total cost
Direct materials	3500	24.00	84000
Conversion	2800	103.60	290080
Total cost of ending work in process				374080
Total costs accounted for				5441790

2.

Date	General Journal	Debit	Credit
May 31	Finished goods inventory	5067710
	Work in process inventory		5067710
	(To record transfer of goods to finished goods inventory)