Question

During April, the first production department of a process manufacturing system completed its work on 420,000 units of a product and transferred them to the next department. Of these transferred units, 84,000 were in process in the production department at the beginning of April and 336,000 were started and completed in April. April's beginning inventory units were 80% complete with respect to materials and 20% complete with respect to conversion. At the end of April, 106,000 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to conversion. Prepare the number of equivalent units with respect to both materials and conversion costs in the production department for April using the FIFO method. Equivalent Units of Production - FIFO Units % Materials EUP-Materials % Conversion EUP- Conversion Equivalent units of production The production department had $1,452,832 of direct materials and $1,035,300 of conversion costs charged to it during April. Also, its beginning inventory of $365,638 consists of $339,208 of direct materials cost and $26.430 of conversion costs. 1. Compute the direct materials cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.) 2. Compute the conversion cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.) 3. Using the FIFO method, assign April's costs to the department's output-specifically, its units transferred to the next department and its ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.) Required 1. and 2. Equivalent Units of Production (EUP)- FIFO Method Units % Materials EUP-Materials % Conversion EUP- Convi Equivalent units of production Cost per Equivalent Unit of Production Materials Convers Total costs Costs Costs EUP EUP - Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) Total Costs to Account for: 0 0 0.00 Total costs to account for: Total costs accounted for * Difference due to rounding cost/unit 0.00 Required 3. Assignment of Costs to Output of Department Cost of 84,000 units from beginning inventory Beginning inventory EUP Cost per Total cost Materials to complete Conversion to complete Total costs to complete Total cost of 84,000 units in beginning inventory Cost of units started and completed this period Direct materials Conversion costs Cost per EUP Total cost EUP $ $ $ 0.00 0.00 0.00 0.00 Total cost of 336,000 units started and completed Total cost of 420,000 units transferred out Costs of units in ending inventory EUP Direct materials Cost per 0.00 $ 0.00 $ Total cost 0.00 0.00 Conversion costs Total cost of 106,000 units in ending inventory Total costs assigned

Answer 1

Solution:

Equivalent units of production (EUP) - FIFO method
	Units	%Material	EUP-Material	% Conversion	EUP- Conversion
Beginning units completed this period (A)	84000	20%	16800	80%	67200
Units Started and Completed (B)	336000	100%	336000	100%	336000
units of Ending work in process (D)	106000	80%	84800	30%	31800
Equivalent units of production (C+D)			437600		435000
Cost per EUP			Material		Conversion
Costs incurred this period (Total Costs)		Costs	$1,452,832	Costs	$1,035,300
/Equivalent units of Production		EUP	437600	EUP	435000
Cost per Equivalent unit of Production			$3.32		$2.38
Cost Assignment and Reconciliation
Beginning Inventory Cost:				$365,638
Cost to Complete Beginning Inventory	EUP	Cost per EUP	Total Cost
Direct materials	16800	$3.32	$55,776
Conversion	67200	$2.38	$159,936
Total Cost to complete Beginning Inventory				$215,712
Total Costs of units in Beginning Inventory				$581,350
Cost of units started and completed	EUP	Cost per EUP	Total Cost
Direct Material	336000	$3.32	$1,115,520
Conversion	336000	$2.38	$799,680
Total Cost of units started and completed				$1,915,200
Total cost of units transferred out				$2,496,550
Cost of ending work in process	EUP	Cost per EUP	Total Cost
Direct Material	84800	$3.32	$281,536
Conversion	31800	$2.38	$75,684
Total Ending work in process				$357,220
Total Costs accounted for				$2,853,770

Cost Charged to production
Total Cost of Beginning Work in process	$365,638
Total Costs incurred this period	$2,488,132
Total Cost to account for	$2,853,770
Total Cost Accounted for	$2,853,770
*Difference due to rounding cost/unit	$0