Question

Hello! Can someone please help me solve this problem step by step!

Thanks so much!

Aztec Inc. produces soft drinks. Mixing is the first department, and its output is measured in gallons. Aztec uses the FIFO method. All manufacturing costs are added uniformly. For July, the mixing department provided the following information: Production: Units in process, July 1, 80% complete 40,000 gallons Units completed and transferred out 260,000 gallons Units in process, July 31, 75% complete 16,000 gallons Costs: Work in process, July 1 $ 64,000 Costs added during July 520,000 Required: 1. Calculate the equivalent units for July. equivalent units 2. Calculate the unit cost. Round your answer to the nearest cent. per unit $ 3. Assign costs to units transferred out and EWIP using the FIFO method. Note: Do not round interim computations. Cost of units transferred out Ending work in process

Answer 1

Requirement 1

Equivalent units = 240,000

Working

Requirement 2

Cost per Equivalent unit = $2.17

Requirement 3

	Total
Units Completed	$ 558,000
Ending Inventory	$ 26,000

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
			Conversion cost		Conversion cost
Beginning WIP	40,000		80%		20%
Units introduced	236,000
Total units to be accounted for	276,000
Completed and Transferred unit	260,000		0%		100%
Ending WIP	16,000		0%		75%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units			Conversion cost
Units Transferred:				% completed this period	Equivalent Units
From WIP	40,000			20%	8,000
From units started/Introduced	220,000			100%	220,000
Total	260,000				228,000
	Total Units			Conversion cost
Ending WIP				% completed this period	Equivalent Units
Total	16,000			75%	12,000
Total EUP	276,000				240,000

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion cost		TOTAL
Cost incurred in Current Period			$ 520,000		$ 520,000
Total Equivalent Units	240,000		240,000
Cost per Equivalent Units	$ 0.00		$ 2.17		$ 2.17
Cost of Beginning WIP					$ 64,000
Total cost to be accounted for					$ 584,000

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		260,000.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	8,000	$ 0.00	$ 0
	Conversion cost	8,000	$ 2.17	$ 17,333	$ 17,333
B	From units started & completed
	Material	220,000	$ 0.00	$ 0
	Conversion cost	220,000	$ 2.17	$ 476,667	$ 476,667
C=A+B	Total				$ 494,000
D	Cost of Beginning WIP				$ 64,000
E=C+D	Total Cost of Units transferred				$ 558,000
	Cost of	Ending WIP		16,000.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Material	12,000	$ 0.00	$ 0
G	Conversion cost	12,000	$ 2.17	$ 26,000
H = F + G	Total Cost of Ending WIP				$ 26,000
I = E + H	Total Cost accounted for				$ 584,000
J	Rounding Off Differences				$ 0
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]				$ 584,000

Ignore material column in working