Question

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 28,200 units of product to finished goods inventory. Its 4,200 units of beginning work in process consisted of $73,980 of direct materials and $1,308,684 of conversion costs. It has 3,000 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $656,100 of direct material costs and $2,669,316 of conversion costs were charged to production.

• Beginning work in process consisted of 4,200 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion.
• Of the 28,200 units completed, 4,200 were from beginning work in process. The remaining 24,000 were units started and completed during May.

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

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	1382664
Costs incurred this period	3325416
Total costs to account for:	4708080
Total costs accounted for	4708080
Difference due to rounding cost/unit	0
Unit reconciliation:
Units to account for:
Beginning work in process inventory - units	4200
Units started this period	27000
Total units to account for	31200
Total units accounted for:
Units completed and transferred out	28200
Ending work in process - units	3000
Total units accounted for	31200
Equivalent units of production (EUP) - FIFO method
	Units	% Materials	EUP-Materials	% Conversion	EUP-Conversion
Beginning work in process inventory	4200	0%	0	60%	2520
Started and completed	24000	100%	24000	100%	24000
Ending work in process	3000	100%	3000	80%	2400
Total units			27000		28920
Cost per equivalent unit of production			Materials		Conversion
Costs incurred this period			656100		2669316
Total costs		Costs	656100	Costs	2669316
÷ Equivalent units of production		EUP	27000	EUP	28920
Cost per equivalent unit of production			24.30		92.30
Total costs accounted for:
Beginning inventory cost:				1382664
Cost to complete beginning inventory	EUP	Cost per EUP	Total cost
Direct materials	0	24.30	0
Conversion	2520	92.30	232596
Total cost to complete beginning inventory				232596
Total cost of units in beginning inventory				1615260
Cost of units started and completed
Direct materials	24000	24.30	583200
Conversion	24000	92.30	2215200
Total cost of units started and completed				2798400
Total cost of units transferred out				4413660
Costs of ending work in process	EUP	Cost per EUP	Total cost
Direct materials	3000	24.30	72900
Conversion	2400	92.30	221520
Total cost of ending work in process				294420
Total costs accounted for				4708080