Question

Tamar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process..

Required Information [The following information applies to the questions displayed below) Tamar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 24,300 units, and transferred 25,200 units of product to the Assembly department. Its 3.600 units of beginning work in process consisted of $40,320 of direct materials and $1,006,848 of conversion costs. It has 2.700 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month $573,480 of direct materials costs and $2.413,152 of conversion costs were charged to the Forming department. The following additional information is available for the Forming department. Beginning work in process consisted of 3.600 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion • Of the 25,200 units transferred out. 3.600 were from beginning work in process. The remaining 21.600 were units started and completed during May Assume that Tamar uses the FIFO method to account for its process costing system

Answer 1

Credit Date Account Titles and Explanation Debit May-31 Work in Process - Assembly $ 3,768,984 Work In Process Inventory - Forming |(To record the transfer of goods to next department) $ 3,768,984 Costs transferred to next department is computed below:

D F A B с E 16 Equivalent units of production (EUP) - FIFO Method: 17 Units % Materials EUP - Materials % Conversion EUP-Conversion 18 Beginning goods in process inventory - units 3,600 0% 60% 2,160 19 Units started and completed this period 21,600 100% 21,600 100% 21,600 20 Ending goods in process- units 2,700 100% 2,700 80% 2,160 21 Total units 24,300 25,920 22 Cost per equivalent unit of production: Materials Conversion 23 Cost incurred this period $ 573,480 $ 2,413,152 24 Total costs Costs $ 573,480 Costs $ 2,413,152 25 Equivalent units of production EUP 24,300 EUP 25,920 26 Cost per equivalent unit $ 23.60 $ 93.10 27 Total cost accounted for: 28 Beginning inventory cost $ 1,047,168 29 Cost to complete beginning inventory EUP Cost per EUP Total cost 30 Direct material 0 $ 23.60 $ 31 Conversion 2,160 $ 93.10 $ 201,096 32 Total cost to complete beginning inventory $ 201,096 33 Total cost of units in beginning inventory $ 1,248,264 34 Cost of units started and completed EUP Cost per EUP Total cost 35 Direct materials 21,600 $ 23.60 $ 509,760 36 Conversion 21,600$ 93.10 $ 2,010,960 37 Total cost of units started and completed $ 2,520,720 38 Total cost of units transferred out $ 3,768,984

B B С D E F 17 % Materials EUP - Materials % Conversion =100%-100% O =100%-40% 1 =+B19*c19 1 1 =+B20*C20 0.8 =+D18+D19+D20 Materials 573480 Costs =+D23 Costs EUP =+D21 EUP |=+D24/D25 EUP-Conversion =+B18*E18 =+B19*E19 =+B20*E20 =+F18+F19+F20 Conversion 2413152 =+F23 =+F21 =+F24/F25 A 16 Equivalent units of production (EUP) - FIFO Method: Units 18 Beginning goods in process inventory - units 3600 19 Units started and completed this period 21600 20 Ending goods in process- units 2700 21 Total units 22 Cost per equivalent unit of production: 23 Cost incurred this period 24 Total costs 25 Equivalent units of production 26 Cost per equivalent unit 27 Total cost accounted for: 28 Beginning inventory cost 29 Cost to complete beginning inventory EUP 30 Direct material =+018 31 Conversion =+F18 32 Total cost to complete beginning inventory 33 Total cost of units in beginning inventory 34 Cost of units started and completed EUP 35 Direct materials =+D19 36 Conversion =+F19 37 Total cost of units started and completed 38 Total cost of units transferred out =40320+1006848 Cost per EUP Total cost =+D26 =+B30*C30 =+F26 =+B31*C31 =+D30+D31 =+E28+E32 Cost per EUP Total cost =+D26 =+B35C35 =+F26 =+B36*C36 =+D35+D36 =+E33+E37