Question

Assume the following information:

   Percent Complete

Milling DepartmentUnits Materials  Conversion

Beginning work in process inventory 200   40%   30%

Units started into production during March 6,200           

Units completed during the period and transferred to the next department 5,800   100%   100%

Ending work in process inventory 600   70%   60%

Milling DepartmentMaterials Conversion

Cost of beginning work in process inventory$10,000  $15,000  

Costs added during the period 304,000   385,000  

Total cost$314,000  $400,000  

Using the FIFO method, the total cost of the ending work in process inventory with respect to materials is closest to:

Answer 1

Correct answer-----------$43,516

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed	% completed this period
	Material	Conversion	Material	Conversion
Beginning WIP	200	40%	30%	60%	70%
Units introduced	6,200
Total units to be accounted for	6,400
Completed and Transferred unit	5,800	0%	0%	100%	100%
Ending WIP	600	0%	0%	70%	60%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material	Conversion
Units Transferred:	% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	200	60%	120	70%	140
From units started/Introduced	5,600	100%	5,600	100%	5,600
Total	5,800		5,720		5,740
	Total Units	Material	Conversion
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	600	70%	420	60%	360
Total EUP	6,400		6,140		6,100

.

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material	Conversion	TOTAL
Cost incurred in Current Period	$ 304,000	$ 385,000	$ 689,000
Total Equivalent Units	6,140	6,100
Cost per Equivalent Units	$ 49.51	$ 63.11	$ 112.63
Cost of Beginning WIP	$ 10,000	$ 15,000	$ 25,000
Total cost to be accounted for	$ 714,000

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred	5,800.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	120	$ 49.51	$ 5,941
	Conversion	140	$ 63.11	$ 8,836	$ 14,777
B	From units started & completed
	Material	5,600	$ 49.51	$ 277,264
	Conversion	5,600	$ 63.11	$ 353,443	$ 630,706
C=A+B	Total				$ 645,484
D	Cost of Beginning WIP		$ 25,000
E=C+D	Total Cost of Units transferred		$           670,483.90
	Cost of	Ending WIP	600.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Material	420	$ 49.51	$ 20,795
G	Conversion	360	$ 63.11	$ 22,721
H = F + G	Total Cost of Ending WIP		$ 43,516
I = E + H	Total Cost accounted for	$ 714,000
J	Rounding Off Differences	$ 0
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]	$ 714,000