Question

5 Data concerning a recent period's activity in the Assembly Department, the first processing department in a company that uses the FIFO method in its process costing, appear below: Hint Coat of work in process inventory at the beginning of the period Equivalent units in the ending work in process inventory Equivalent units required to complete the beginning work in process inventory Cost per equivalent unit for the period Materials $ 4,000 380 640 $ 2.00 Conversion $ 710 190 1,280 $ 0.50 A total of 25,900 units were completed and transferred to the next processing department during the period. Beginning work in process inventory consisted of 1,200 units and ending work in process inventory consisted of 2,500 units. Required: 1. Compute the Assembly Department's cost of ending work in process inventory for materials, conversion, and in total for the period. 2. Compute the Assembly Department's cost of units transferred out to the next department for materials, conversion, and in total for the period. Materials Conversion Total 1. Cost of ending work in process inventory 2 Cost of the units transferred to the next department

Answer 1

Total Solution: 1. Cost of ending work in process inventory Particulars Materials Equivalent unit in ending work in 380 units process inventory Cost per equivalent unit for the period $ 2.00 Cost of ending work in process $ 760 (380 units *$ 2) Conversion 190 units $ 0.50 $95 (190 units * $ 0.50) $ 855

2. Cost of units transferred to the next department Working notes: Computation of Units Started and completed during the period is shown below Particulars Units completed and transferred Less: Beginning Work in process inventory Units Started and completed during the period Units 25,900 units (1,200 units) 24,700 units Materials $ 4000 Conversion $ 710 Total $ 4,710 $ 1,920 $ 1,280 (640 equivalent units *$ 2) $ 640 (1280 equivalent units* $ 0.50) Particulars Cost of Work in process inventory at the beginning of the period Cost of equivalent units required to complete the beginning work in process inventory (Equivalent units in beginning WIP Cost per equivalent unit) Cost of units started and completed during the period (Units started and completed Cost per equivalent unit) Cost of units transferred out to next department $ 61,750 $ 49,400 (24,700 units* $ 2) $ 12,350 (24,700 units *$ 0.50) $ 68,380 $ 54,680 ($ 4000 +$ 1280+$ 49,400) $ 13,700 ($ 710+$ 640+$ 12,350)

Conclusion Particulars 1. Cost of ending work in process inventory 2. Cost of units transferred to the next department Materials $ 760 $ 54,680 Conversion $ 95 $ 13,700

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