Question

DM added at the start of production and CC added uniformly.  

BWIP: 40 units; DM $100; CC $182 & 30% completed as to CC
During the current period,
      150 units started & completed in the current period
EWIP: 60 units; 40% complete as to CC.

FIFO method is used. Suppose that the current cost per EU for DM $2 and cost per EU for CC $3. Compute the cost of units completed & transferred out (TO) and the cost of EWIP.

Answer 1

	DM	CC
BWIP equivalent units [ BWIP units * (1-% completion) ]	0	28
EWIP equivalent units [ EWIP * % completion ]	60	24

	DM	CC	Total
Cost of BWIP	100	182
Cost of BWIP completed in current period [ BWIP equivalent units * cost per EU ]	0	84
Cost of units started and completed during current period [ units started and completed * cost per EU ]	300	450
cost of units completed & transferred out	400	716	1116

	DM	CC	Total
cost of EWIP [ EWIP equivalent units * Cost per EU ]	120	72	192