Question

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 Cost 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 $ 3,100 640 290 1,110 $ 1.30 % e.60 480 528 A total of 26,600 units were completed and transferred to the next processing department during the period. Beginning work in process inventory consisted of 1,800 units and ending work in process inventory consisted of 2.900 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 perioc. Materials Conversion Total 1. Cost of ending work in process inventory 2 Cost of the units transferred to the next department

Answer 1

Solution:

Total costs accounted for:	EUP	Cost per EUP	Total Cost
Costs of ending work in process
Direct materials	480	$1.30	$624
Conversion	290	$0.60	$174
Total cost of ending work in process			$798
Cost of units transferred out:
Partially completed beginning work in process
Direct materials	520	$1.30	$676
Conversion	1,110	$0.60	$666
Units added and completed
Direct materials (26600-1800 Units)	24,800	$1.30	$32,240
Conversion	24,800	$0.60	$14,880
Total Cost of Completed Units			$48,462

From the information given in the question, it is clear that company is used First in First Out Method in Process Costing.

Under this method the beginning work in process inventory is completed first and then the units introduced during the period is completed. So the completed units consists partially completed beginning work in process and the units introduced fresh during the period.

Hence, here is the summarized amount

	Materials	Conversion	Total
1. Cost of Ending Work In Process Inventory	$624	$174	$798
2. Cost of the units transferred to the next department	$32,916 ($676 + 32,240)	$15,546 (666 + 14,880)	$48,462

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you