Question

Pantanal, Inc., manufactures car seats in a local factory. For costing purposes, it uses a first-in, first-out (FIFO) process costing system. The factory has three departments: Molding, Assembling, and Finishing. Following is information on the beginning work-in-process inventory in the Assembling Department on August 1: Costs Degree of Completion Work-in-process beginning inventory (11,000 units) Transferred-in from Molding Direct materials costs Conversion costs Work-in-process balance (August 1) 100% 70 $ 96,000 168,000 62,000 $326,000 During August, 101,000 units were transferred in from the Molding Department at a cost of $2,070,500 and started in Assembling. The Assembling Department incurred other costs of $949,690 in August as follows: Direct materials costs Conversion costs Total August costs August Costs $ 808,170 141,520 $949,690 At the end of August, 20,000 units remained in inventory that were 90 percent complete with respect to direct materials and 50 percent complete with respect to conversion. Required: Compute the cost of goods transferred out in August and the cost of work-in-process ending inventory. (Do not round intermediate calculations.) Cost of goods transferred out Cost of WIP ending inventory

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer Statement of Equivalent Units Transferred in % Completion From Molding % Completion Department Physical Units Direct Material % Completion Conversion Cost 11000 3300 6600 3 Particulars Units from beginning inventory 4 completed and transferred Units started and transferred 5 (11000+101000-20000) 6 Units in ending inventory 7 Equivalent Units 100 92000 20000 100 100 92000 20000 112000 92000 18000 113300 92000 9000 107600 10 Statement of cost Per Equivalent Units Transferred in From Molding Direct Material Conversion Cost Department 11 Cost incurred during the period 2070500 808170 141520 12 Total Cost 2070500 808170 141520 13 No. of equivalent Units 112000 113300 107600 14 Cost per equivalent Uints 18.487 7.133 1.315 15

326000.00 18 Cost of Goods Transferred Out 19 Cost in Beginning inventory Cost incurred to complete beginning 20 inventory 21 Direct Material (3300*7.133) 22 Conversion cost (6600*1.315) Total cost of beginning inventory 23 transferred Cost of units started and completed 24 (92000*(7.133+1.315+18.487)) 25 Total cost of goods transferred out 23538.93 8680.59 358219.53 2478006.98 2836226.51 27 Cost of units in ending inventory Transferred in from moulding 28 department (20000*18.487) 29 Direct Material (18000*7.133) 30 Conversion cost (9000*1.315) 31 Total cost of ending inventory 369732.14 128394.17 11837.17 509963.49 32 33 Thus the final answer 34 Cost of goods transferred out 35 Cost of WIP ending Inventory 2836226.51 509963.49 37 Note We can round final answer to 0 decimal places. As nothing has been mentioned in question, so I 29 have rounded it to 2 decimal places.