Question

FIFO Method, Single Department Analysis, One Cost Category

Hatch Company produces a product that passes through three processes: Fabrication, Assembly, and Finishing. All manufacturing costs are added uniformly for all processes. The following information was obtained for the Fabrication Department for June:

1. Work in process, June 1, had 90,000 units (40 percent completed) and the following costs:

   Direct materials	$72,720
   Direct labor	109,000
   Overhead	36,000

2. During the month of June, 190,000 units were completed and transferred to the Assembly Department, and the following costs were added to production:

   Direct materials	$226,000
   Direct labor	144,000
   Overhead	162,000

3. On June 30, there were 45,000 partially completed units in process. These units were 80 percent complete.

Required:

Prepare a cost of production report for the Fabrication Department for June using the FIFO method of costing. Round the cost per equivalent unit to the nearest cent.

Hatch Company
Fabrication Department
Production Report for June
Unit Information
Units to account for:
Total units to account for
Units accounted for:
	Physical Flow	Equivalent Units
Total units accounted for
Cost Information
Costs to account for:
		Manufacturing Costs
		$
Total costs to account for		$
Cost per equivalent unit		$
Costs accounted for:
Units transferred out:
Units, beginning work in process:
Prior-period costs		$
Current costs to finish units
Units started and completed
Total cost transferred out		$
Units, ending work in process
Total costs accounted for		$

Answer 1

Units charged to production
Inventory in Process, Beginning	90000
Units started	145000
Total Units accounted for	235000
Units to be assigned costs
	Whole Units	Equivalent units of Production
Inventory in Process, Beginning	90000	54000
Units started and completed	100000	100000
Inventory in Process, Ending	45000	36000
Total Units to be assigned costs	235000	190000
Cost Information
Cost per equivalent unit
Total Costs for the month		$      532,000
Total Equivalent units		190000
Cost per equivalent unit		$            2.80
Costs to account for
Inventory in Process, Beginning		$      217,720
Costs incurred in December		$      532,000
Total Costs to account for		$      749,720
Costs accounted for:
Units transferred out:
Units, beginning work in process:
Prior-period costs		$      217,720
Current costs to finish units		$      151,200
Units started and completed		$      280,000
Total cost transferred out		$      648,920
Units, ending work in process		$      100,800
Total costs accounted for		$      749,720

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