Question

Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] During April, the first production department of a process manufacturing system completed its work on 300,000 units of a product and transferred them to the next department. Of these transferred units, 60,000 were in process in the production department at the beginning of April and 240,000 were started and completed in April. April's beginning inventory units were 60% complete with respect to materials and 40% complete with respect to conversion. At the end of April, 82,000 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to conversion.

Exercise 16-11A FIFO: Costs assigned to output LO C4, P4

The production department had $850,368 of direct materials and $649,296 of conversion costs charged to it during April. Also, its beginning inventory of $167,066 consists of $118,472 of direct materials cost and $48,594 of conversion costs.

1. Compute the direct materials cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.)
2. Compute the conversion cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.)
3. Using the FIFO method, assign April’s costs to the department’s output—specifically, its units transferred to the next department and its ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

Answer

• Workings

Units Reconciliation
Units to account for:
Beginning WIP	60,000
Units started this period	322,000
Total Units to account for	382,000
Total Units accounted for:
Completed & Transferred out	300,000
Ending WIP	82,000
Total Units accounted for	382,000

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	82,000	80.0%	65,600	30.0%	24,600
Units STARTED & COMPLETED	240,000	100%	240,000	100%	240,000
Units of beginning WIP	60,000	40.00%	24,000	60%	36,000
Equivalent Units of Production			329,600		300,600

• Requirement 1 and 2

COST per EUP			Material		Conversion
Cost incurred this period			$       850,368.00		$                  649,296.00
Total Costs		Costs	$       850,368.00	Costs	$                  649,296.00
Equivalent units of production		EUP	329,600	EUP	300,600
Cost per EUP			$                2.5800		$                          2.1600

• Requirement 3

---Cost transferred out

Cost Transferred out:	EUP	Cost per EUP	Total Cost
Cost of Beginning WIP			167,066.00
Cost to complete beginning WIP-
- Direct Materials	24,000.00	2.58	61,920.00
- Conversion	36,000.00	2.16	77,760.00
Total cost to complete beginning WIP			306,746.00
Cost of Units started & completed this period:	EUP	Cost per EUP	Total Cost
- Direct Materials	240,000.00	2.58	619,200.00
- Conversion	240,000.00	2.16	518,400.00
Total costs started & Completed this period			1,137,600.00
Total cost of work finished this period				1,444,346.00

--Ending WIP Cost

Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	65,600	$                              2.58	$       169,248.00
- Conversion	24,600	$                              2.16	$          53,136.00
Total cost of ending WIP				$             222,384.00