During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 60,000 were in process in the production department at the beginning of April and 240,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to conversion. At the end of April, 82,000 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to conversion. The production department had $850,368 of direct materials and $649,296 of conversion costs charged to it during April. Also, its beginning inventory of $167,066 consists of $118,472 of direct materials cost and $48,594 of conversion costs. Using the FIFO method, prepare the direct materials cost and the conversion cost per equivalent unit and assign April’s costs to the department’s output. (Round “Cost per EUP” to 2 decimal places.)
Answer:
| Opening units | 60,000 | |
| Started | 262,000 | |
| 322,000 |
| Completed units | 240,000 | |
| Closing WIP | 82,000 | |
| 322,000 |
| Equivalent Productio Units | Material | Direct Labour | ||||
| Opening Units | 60,000 | 36,000 | 24,000 | |||
| Started | 180,000 | 180,000 | 180,000 | |||
| Ending WIP | 82,000 | 65,600 | 24,600 | |||
| 322,000 | 281,600 | 228,600 | ||||
| Cost | 850,368 | 649,296 | ||||
| Cost per unit | 3.02 | 2.84 |
- Using the FIFO method, assign April’s costs to the department’s output
— specifically, its units transferred to finished goods and its ending goods in process inventory.
| Direct Materials | 971,208 | |||
| Direct Labor | 697,186 | |||
| Costs of goods transferred out | 1,668,394 | |||
| Cost of beginning goods in process inventory | ||||
| Direct materials $ | 167,066 | |||
| Direct labor $ | 118,472 | |||
| 285,538 | ||||
| Costs to complete beginning goods in process | ||||
| Direct materials | 108,712 | |||
| Direct labor | 68,168 | |||
| 176,879 | ||||
| Total costs to complete Cost of units started and completed this period | ||||
| Direct materials | 543,559 | |||
| Direct labor | 511,257 | |||
| Total cost of units started and completed | 1,054,816 | |||
| Total costs of goods transferred out | 1,231,695 | |||
| Cost of ending goods in process inventory | ||||
| Direct materials | 198,097 | |||
| Direct labor | 69,872 | |||
| Total costs of ending goods in process | 267,969 | |||
| Total costs accounted for | 1,499,664 | |||
