Question

its Department R. Recyclers, Inc., processes donated scrap cloth into towels for sale in local thrift shops. It sells the products at cost. The direct materials costs are zero, but the tracks the processing volume and costs incurred in each period. At the start o- the current period, 300 towels were in process and were 60 percent complete. The costs incurred were $186. During the month, costs of $10.800 were incurred, 3.600 towels were started, and 150 towels were still in process at the end of the month. percent complete. tthe end of the month, the towels were 20 Required: . Prepare a production cost report: the company uses FIFO proce5s costing. (Round "Cost per equivalent unit" to 2 decimal places.) RECYCLERS, INC. Production Cost Report-FIFO Flow of Production Units Compute Equivalent Units Physical Units Conversion Costs Units to be accounted for Beginning WIP inventory 300 Units started this period 3.600 Total units to be accounted for 3.900 Units accounted for Units oompleled and transferrod out From beginning inventory 18C Started and completed currently 3,450 3.750 Units in ending WIP inventory 150 30 Taotal units accounted for 3,900 3.660 Conversion Costs Total Costs Costs Costs to be accounted for: 186 s Costs in beginning WIP inventory S 186 10,800 Current period costs. 10,800 S 10,986 10,986 Total costs to be accounted for Cast per equivalent unit: $ 3.00 Conversion costs Costs accounted for Costs assigned to units transferred out Costs from beqinning inventory Current costs added to complete beginning WIP inventory Conversion costs Tolal costs from beginning inverıtory Current costs of units started and completed: Conversion costs Tolal costs of units starled and completed Total costs of units transfemred out Costs assigned to ending WP inventory: Conversion costs ventory Total costs accounted for Show the flow of costs through T-accounts. Assume that current period conversion costs are credited various payables Various Payables Work in Process Beginning invetory Beg.bal End.bal. This periad's costs: Ending inventory Finished Goods Inventory Beg ba End.bal.

Answer 1

a.

RECYCLERS, INC.
Production Cost Report-FIFO
Flow of Production Units	Compute Equivalent Units
	Physical Units	Conversion Costs
Units to be accounted for:
Beginning WIP inventory	300
Units started this period	3600
Total units to be accounted for	3900
Units accounted for:
Units completed and transferred out:
From beginning inventory (300 x 40%)	300	120
Started and completed currently	3450	3450
Units in ending WIP inventory (150 x 20%)	150	30
Total units accounted for	3900	3600

Costs	Total Costs	Conversion Costs
Costs to be accounted for:
Costs in beginning WIP inventory	186	186
Current period costs	10800	10800
Total costs to be accounted for	10986	10986
Cost per equivalent unit:
Conversion costs ($10800/3600)		3.00
Costs accounted for:
Costs assigned to units transferred out:
Costs from beginning inventory	186	186
Current costs added to complete beginning WIP inventory:
Conversion costs	360	360
Total costs from beginning inventory	546	546
Current costs of units started and completed:
Conversion costs	10350	10350
Total costs of units started and completed	10350	10350
Total costs of units transferred out	10896	10896
Costs assigned to ending WIP inventory:
Conversion costs	90	90
Total ending WIP inventory	90	90
Total costs accounted for	10986	10986

b.

Work in Process					Various Payables
Beginning inventory	186				Beg. Bal.		0
							10800
This period's costs:
Conversion costs	10800	10896	Completed and transferred		End. Bal.		10800
Ending inventory	90
Finished Goods Inventory
Beg. Bal.	0
Completed	10896
End. Bal.	10896