The following data pertain to a production center of Navajo Company, a manufactu

Question

The following data pertain to a production center of Navajo Company, a manufacturer of garbage bins.

REQUIRED: Using the attached forms, prepare the schedules listed below that are required to prepare the Cost of Production Report for Navajo Company, using the FIFO method. Round all costs per equivalent unit to four decimal places and all other dollar amounts to the nearest whole dollar.

(1) Schedule of Physical and Equivalent Units.

(2) Unit Cost Analysis Schedule.

(3) Cost Summary Schedule.

Work in Process Inventory, August 1: (80% complete as to materials and 30% as to conversion costs) Number of Units Direct Materials Cost Direct Labor Cost Manufacturing Overhead Applied (S7 per machine hour) 5,000 8,200 3,400 2,100 Units Started in August 14,500 Costs Incurred in August: Direct Materials Cost Direct Labor Cost Manufacturing Overhead Applied (7,000 machine hours incurred) 23,500 41,200

Explanation / Answer

FIFO method Beggining units 5000 Transferred out 15,500 Started into production 14500 Ending units 4,000 19500 19500 Equivalent units Material Conversion Beginning units 5000 5000 Completion in current period 20% 70% A 1000 3500 Units started and completed 10500 10500 Completion 100% 100% B 10500 10500 Ending Units 4,000 4,000 Completion 70% 40% C 2800 1600 Total units A+B+C 14300 15600 Cost per equivalent units Per unit cost Cost Total units Per unit cost Material cost 23500 14300 1.64 Conversion cost 90200 15600 5.78 Total 113700 7.43 Cost of goods sold Material convertion cost Beginning work in progress A 8200 5500 13700 Beginning inventory completed Completion 20% 70% Per unit cost 1.64 5.78 Units 5000 5000 Total cost   B 1643 20237 21881 Units started and completed Completion 100% 100% Per unit cost 1.64 5.78 Units 10500 10500 Total cost    C 17255 60712 77967 Total cost A+B+C 27099 80949 113547 Ending work in progress Completion 70% 40% Per unit cost 1.64 5.78 Units 4,000 4,000 Total cost     4601 9251 13853

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