Question

Rose Company uses FIFO process costing and produces its finished product in 2 departments: Machining and Painting. The following information is available for the Painting Department for May: The beginning work in process inventory was $74,226 ($54,000 transferred-in costs and $20,226 conversion costs) and consisted of 1,800 units that were 70% complete as to conversion costs. During May, a total of 15,700 units were completed and transferred out to the Finished Goods Inventory. The ending work in process consisted of 1,100 units that were 10% complete as to conversion costs. The following costs were incurred during May: direct materials $136,590; direct labor $80,000; and factory overhead $219,730. Direct materials are added at the end of the process in the Painting Department and conversion costs are incurred evenly throughout the production process.

Answer 1

Calculation of Equivalent Units Statement of equivalent units of production Materials Conversion Cost Percentage Of Equivalent Percentage Of Equivalent Completion Units Completion Units B C=A*B D E=A*D Particulars Input Units Particulars Output Units A Opening work in progress 1,800 100% 1,800 30% 540 Beginning work in 1,800 progress units completed Units started and completed during this 15,000 period Units Completed Units Introduced 100% 100% 13,900 15,700 13,900 15,700 13,900 14,440 Closing work in progress 1,100 0% 10% 110 16,800 Total 16,800 15,700 14,550 Particulars Equivalent units Materials 15,700 Conversion Cost 14,550 Particulars Costs added during the Equivalent units B Cost per equivalent unit year A Materials $ 136,590 15,700 S 8.70 Conversion Cost $ 299,730 80000+219730 14,550 S 20.60 A/B Cost of goods finished and transferred Materials Cost S 54,000 Conversion Cost S 20,226 Cost of opening work in progress $ Cost of Beginning work in progress units completed $ Cost of Units started and completed during this period $ 15,660 (1800 *$8.7) 120,930 (13900 *$8.7) 11,124 (540 *$20.6) 286,340 |(13900 *$20.6) $ Cost of goods finished and transferred S 190,590 S 317,690 Cost of closing work in progress Materials Cost Conversion Cost $ 2,266 |(110 *$20.6) Cost of closing work in progress $ (0 *$8.7) S S 2,266 Cost of goods finished and transferred Cost of closing work in progress Materials Cost $ 190,590 $ Conversion Cost Total $ 317,690 $ $ 2,266 $ 508,280 2,266 Notes In FIFO method for calculating cost per equivalent units, Only costs incurred during the period should consider Beg Bal $ 508,280 2,266 $ Materials Direct labor Factory Overhead Work in progress-Painting 74,226 Finished Inventory $ 136,590 Ending inventory $ 80,000 219,730 510,546 S $ $ $ 510,546