Question

Clover Sweet Inc, manufactures a product that goes through two departments prior to completion. The information shown in the table below is available about work in the first department, the Mixing Department during June Percentage Completed Materials Conversion 75% 20% Units Work in process, beginning 39,000 Started Into production 516,000 Completed and transferred out 477,000 Work in process, ending 78.000 40% 25% Work in process, beginning Cost added during June Materials $ 17,000T $456.000 Conversion $ 26.500 $130.000 Required: Assume that the company uses the FIFO method. 1. Determine the equivalent units for June for the first process Materials Conversion Equivalent of production

Answer 1

Solution 1 to 3:

DE solution 1: 10 Equivalent units of production (EUP) - FIFO method Units % material EUP-Materials% Conversion EUP- Conversion units in process, beginning 39000 25% 9750 80% 31200 Units started and completed (477000- 39000) 438000 100% 438000 100% 438000 Toal units completed and transferred out 447750 469200 Units in process, ending 78000| 40% 312001 25% 19500 Equivalent units of production 478950 488700 13 14 Solution 2: 16 17 18 19 Cost per Equivalent unit: Material Conversion Cost added during June $456,000 $130,000 /Equivalent units of Production 478950 488700 Cost per Equivalent unit of Production | $0.952 $0.266 Solution 3: Cost of Units Transferred Out Material Conversion Total transferred out work in EUP Cost per EUP current Cost process,July 1 447750 $0.952 $426,258 $17,000 469200 $0.266 $124,807 $26,500 Total cost $443,258 $151,307 $594,565 Cost of ending work in process Material Conversion Total Ending work in process EUP Cost per EUP Total Cost 31200 $0.952 $29,702 19500 $0.266 $5,187 $34,889 35 36 37 38 39 40 41 42 43 44 45 46 47 et204 Sheet203 ) Sheet205 Sheet206 Sheet206 (4)

ER УИ 17 Solution 4: 18 Cost Reconciliation Report - July Particulars Amount costs to be accounted for: Cost of beginning WIP inventory ($17000+$26500) $43,500 Cost added to production ($139400+$244200) $586,000 $629,500 26 Total Cost to be accounted for Costs accounted for as follows: Cost of unit transferred out Cost of Ending WIP 27 $594,565 $34,889 28 29 30 32 Total cost accounted for Add: Difference due to rounding off error Total $629,455 45 629500 32 33 36 37 38 39 40 41 42 43 44 45 46 47 48 10 et204 ) Sheet203 ) Sheet205 Sheet206 Sheet206 (4)