Calculate Equivalent Units, Unit Costs, and Transferred
Costs—FIFO Method
Kipling Manufacturing, Inc., operates a plant that produces its own
regionally-marketed Super Salad Dressing. The dressing is produced
in two processes, blending and bottling. In the Blending
Department, all materials are added at the beginning of the
process, and labor and overhead are incurred evenly throughout the
process. Kipling uses the FIFO method. The Work in Process—Blending
Department account for January 2016 follows:
Work in Process - Blending Department | |
---|---|
January 1 inventory (4,000 gallons, 75% processed) | $40,000 |
Transferred to Bottling Department (70,000 gallons) | |
January charges: | |
Direct material (71,000 gallons) | 568,000 |
Direct labor | 164,000 |
Manufacturing overhead | 186,000 |
January 31 inventory ( _______ gallons, 60% processed) |
Calculate the following amounts for the Blending
Department:
a. Number of units in the January 31 inventory.
b. Equivalent units for materials and conversion costs.
c. January cost per equivalent unit for materials and conversion
costs.
d. Cost of the units transferred to the Bottling Department.
e. Cost of the incomplete units in the January 31 inventory
Round average cost per equivalent unit to two decimal
places, if applicable. Round other answers to the nearest
whole number, when appropriate.
Kipling Manufacturing, Inc. Blending
Department Flow of Units and Equivalent Units Calculation, January 2016 |
||||||
---|---|---|---|---|---|---|
Equivalent Units | ||||||
% in | Direct | % in | Conversion | |||
January | Materials | January | Costs | |||
Complete/Transferred | ||||||
Beginning Inventory | Answer | Answer | Answer | Answer | Answer | |
Started and completed | Answer | Answer | Answer | Answer | Answer | |
Ending inventory | Answer | Answer | Answer | Answer | Answer | |
Total | Answer | Answer | b. | Answer | b. |
Product Cost Report | ||||||
---|---|---|---|---|---|---|
Direct | Conversion | |||||
Materials | Costs | |||||
Beginning Inventory | Answer | Answer | Answer | |||
Current | Answer | Answer | Answer | |||
Total Costs to Account For | Answer | Answer | Answer | |||
÷ Total Equivalent Units | Answer | c. | Answer | c. | ||
Average cost / Equivalent unit (round 2 decimal places) | Answer | Answer | ||||
Beginning inventory | ||||||
Costs incurred in Dec. | Answer | |||||
Costs incurred in Jan. | Answer | |||||
Started and finished | Answer | |||||
Cost of goods manufactured | Answer | d. | ||||
Ending inventory: | ||||||
Direct Materials | Answer | |||||
Conversion costs | Answer | |||||
Cost of Ending Inventory | Answer | e. | ||||
Total Costs Allocated | Answer |
Calculate Equivalent Units, Unit Costs, and Transferred Costs—FIFO Method Kipling Manufacturing, Inc., operates a plant that...
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