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FIFO Method, Valuation of Goods Transferred Out and Ending Work in Process K-Briggs Company uses the...

  1. FIFO Method, Valuation of Goods Transferred Out and Ending Work in Process

    K-Briggs Company uses the FIFO method to account for the costs of production. For Crushing, the first processing department, the following equivalent units schedule has been prepared:

    Direct Materials Conversion Costs
    Units started and completed 28,000 28,000
    Units, beginning work in process:
    10,000 × 0% — —
    10,000 × 40% — 4,000
    Units, ending work in process:
    6,000 × 100% 6,000 —
    6,000 × 75% — 4,500
    Equivalent units of output 34,000 36,500

    The cost per equivalent unit for the period was as follows:

    Direct materials $2.00
    Conversion costs 6.00
    Total $8.00

    The cost of beginning work in process was direct materials, $40,000; conversion costs, $30,000.

    Required:

    1. Determine the cost of ending work in process.
    $

    Determine the cost of goods transferred out.
    $

    Feedback

    2. Prepare a physical flow schedule.

    K-Briggs Company
    Physical Flow Schedule
    Units to account for:
    • Started and completed
    • Units, beginning work in process
    • Units completed
    • Units, ending work in process
    • Started and completed
    • Units completed
    • Units started
    • Units, ending work in process
    Total units to account for
    Units accounted for:
    Units completed:
    • Started and completed
    • Units completed
    • Units started
    • Units completed
    • Units, beginning work in process
    • Units started
    • Units completed
    • Units, ending work in process
    • Units started
    Total units accounted for
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Answer #1

Answers

  • [1]
    Cost of ending WIP
    = (6000 units x $ 2) + (4500 units x $ 6)
    = 12000 + 27000
    = $ 39,000
  • [2]
    Cost of goods transferred out
    = (28000 units x $ 8) + (4000 units x $ 6) + (Beginning cost $ 40000 + $ 30000)
    = 224000 + 24000 + 70000
    = $ 318,000
  • [3]

K-Briggs Company

Physical Flow Schedule

Units to account for:

Units, beginning work in process

10000

Units started

34000

Total units to account for

44000

Units accounted for:

Units completed:

Started and completed

28000

Units, beginning work in process

10000

Units, ending work in process

6000

Total units accounted for

44000

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