Question

Required information Problem 20-5AA FIFO: Process cost summary; equivalent units; cost estimates LO C3, C4, P4 [The following information applies to the questions displayed below.] Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 27,700 units of product to finished goods inventory. Its 4,100 units of beginning work in process consisted of $56,115 of direct materials and $888,720 of conversion costs. It has 2,950 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $661,095 of direct material costs and $2,898,840 of conversion costs were charged to production. Beginning work in process consisted of 4,100 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion. Of the 27,700 units completed, 4,100 were from beginning work in process. The remaining 23,600 were units started and completed during May Assume that Tamar uses the FIFO method to account for its process cOsting system. Problem 20-5A Part 1

Answer 1

Answer

Costs Charged to Production:
Cost of beginning WIP	$                     944,835.00
Costs incurred this period	$                 3,559,935.00
Total Cost to account for	$                 4,504,770.00
Total costs accounted for	$                 4,504,770.00
Difference due to rounding cost/unit	$                                      -
Units Reconciliation
Units to account for:
Beginning WIP	4,100
Units started this period	26,550
Total Units to account for	30,650
Total Units accounted for:
Completed & Transferred out	27,700
Ending WIP	2,950
Total Units accounted for	30,650

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	2,950	100.0%	2,950	80.0%	2,360
Units STARTED & COMPLETED	23,600	100%	23,600	100%	23,600
Units of beginning WIP	4,100	0.00%	-	60.00%	2,460
Equivalent Units of Production			26,550		28,420
COST per EUP			Material		Conversion
Cost incurred this period			$       661,095.00		$              2,898,840.00
Total Costs		Costs	$       661,095.00	Costs	$              2,898,840.00
Equivalent units of production		EUP	26,550	EUP	28,420
Cost per EUP			$           24.90000		$                     102.0000

Cost Transferred out:	EUP	Cost per EUP	Total Cost
Cost of Beginning WIP			944,835.00
Cost to complete beginning WIP-
- Direct Materials	-	24.90	-
- Conversion	2,460.00	102.00	250,920.00
Total cost to complete beginning WIP			1,195,755.00
Cost of Units started & completed this period:	EUP	Cost per EUP	Total Cost
- Direct Materials	23,600.00	24.90	587,640.00
- Conversion	23,600.00	102.00	2,407,200.00
Total costs started & Completed this period			2,994,840.00
Total cost of work finished this period				4,190,595.00
Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	2,950	$                            24.90	$          73,455.00
- Conversion	2,360	$                         102.00	$       240,720.00
Total cost of ending WIP				$             314,175.00
Total costs accounted for				$         4,504,770.00

• Requirement 2

	Accounts title	Debit	Credit
May-31	Finished Goods Inventory	4,190,595.00
	Work In Process Inventory		4,190,595.00
	(to record transfer of cost from WIP to Finished Goods)