Question

Reutter, Inc. makes a single product and uses the FIFO method of process costing. The company’s product goes through two processing departments – Etching and Wiring – which completes the process. This problem focuses on the Writing department which received the ‘etched’ products and then completes them by adding appropriate writing. In Wiring, the direct materials are placed into production when the process is 35% complete. Conversion costs are incurred evenly throughout the process. The relevant information for April is below:

Beginning work in process inventory	10,000 items, 30% complete as to conversion
Units started in April	170,000 units
Ending work in process inventory	20,000 items, 40% complete as to conversion
	Transferred-In     Materials         Conversion
Cost of beginning work in process	$    7,000                 $ 0                   $   4,900
Current costs in April	$187,000                 $153,000          $ 244,200

Physical Units Transferred-In Direct Materials Conversion Flow of production WIP, beginning Transferred in To account for Units completed & Transf • Beg WIP • Started & Completed WIP, ending Accounted for Totals Transferred-In Direct Materials | Conversion Costs WIP, beginning | Costs added during period Total costs to account for Divided by equivalent units Assignment of costs Completed units (completed and transferred) • Beg WIP Costs Finish up Beg WIP units • Started & Completed WIP, ending Costs accounted for Complete the T-Accts below. Enter the Beginning and Current costs (you don't need to include the credits). Then include the entry (debit and credit) for the costs for Completed & Transferred Balance the WIP Inventory account by entering the End WIP. WIP Inventory Fin. Goods Inventory Beg TI DM CC1

Answer 1

		% age of completion			Equivalent units
For the month of April		Tfrd.in	Mat.	Conv.	Tfrd.in	Mat.	Conv.
Units to account for:
Beginning WIP	10000
Started in April	170000
Total Units to account for	180000
Units accounted For:
From Beg. Wip	10000	100%	65%	70%	10000	6500	7000
Started& completed in April	150000	100%	100%	100%	150000	150000	150000
Total units compl.&trf.	160000
End.WIP	20000	100%	100%	40%	20000	20000	8000
Total Units accounted For	180000		Equivalent units---1		180000	176500	165000
Costs to account for
Beg. WIP	11900				11900
Costs added in April-------2	584200				187000	153000	244200
Total Costs to account for	596100				198900	153000	244200
Cost/eq.unit---------(2/1)	3.3857				1.0389	0.8669	1.4800
Costs assigned to :
Beg. WIP	11900				11900
Beg. WIP Finished In April	26383.45				10388.89	5634.56	10360.00
Started & compl. in April	507861.66				155833.33	130028.33	222000
Total compl.&trf.to Fin/gds	546145.11				178122.22	135662.89	232360
End.WIP	49954.89				20777.78	17337.11	11840
Total costs assigned	596100				198900	153000	244200

WIP inventory				Fin. Gds. Inventory
	Debit	Credit			Debit	Credit
Beg.	11900			From WIP	546145
TI	187000
DM	153000
CC	244200
Trf. To F/Gds		546145
Ending bal.		49955
	596100	596100