Question

Data concerning a recent period’s activity in the Assembly Department, the first processing department in a company that uses the FIFO method in its process costing, appear below:

	Materials		Conversion
Cost of work in process inventory at the beginning of the period	$	3,900	$	730
Equivalent units in the ending work in process inventory		460		150
Equivalent units required to complete the beginning work in process inventory		640		1,170
Cost per equivalent unit for the period	$	2.10	$	0.70

A total of 25,800 units were completed and transferred to the next processing department during the period. Beginning work in process inventory consisted of 2,900 units and ending work in process inventory consisted of 2,900 units.

Required:

1. Compute the Assembly Department's cost of ending work in process inventory for materials, conversion, and in total for the period.

2. Compute the Assembly Department's cost of units transferred out to the next department for materials, conversion, and in total for the period.

Answer 1

Required 1 :
	Materials	Conversion	Total
Equivalent units in the ending work in process inventory	460	150
(*) Cost per equivalent unit for the period	2.10	0.70
Cost of ending work in process	966	105	1071

Required 2 :
Units completed and transferred	25800
(-) Beginning work in process inventory units	2900
Units started and completed during the period	22900

	Materials	Conversion	Total
Cost of work in process at the beginning of the period	3900	730	4630
Cost of equivalent units required to complete the beginning work in process inventory [ Equivalent units required to complete the beginning work in process inventory * Cost per equivalent unit for the period ]	1344	819	2163
Cost of units started and completed during the period [ Units started and completed during the period * Cost per equivalent unit for the period ]	48090	16030	64120
Cost of units transferred out to the next department	53334	17579	70913