During May, the production department of a process manufacturing system complete
ID: 2419218 • Letter: D
Question
During May, 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, 37,500 were in process in the production department at the beginning of May and 150,000 were started and completed in May. May’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to conversion. At the end of May, 51,250 additional units were in process in the production department and were 60% complete with respect to materials and 20% complete with respect to conversion. The production department had $505,035 of direct materials and $396,568 of conversion cost charged to it during May. Its beginning inventory included $74,075 of direct materials cost and $28,493 of conversion cost.
Process cost summary Using FIFO method
During May, 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, 37,500 were in process in the production department at the beginning of May and 150,000 were started and completed in May. May’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to conversion. At the end of May, 51,250 additional units were in process in the production department and were 60% complete with respect to materials and 20% complete with respect to conversion. The production department had $505,035 of direct materials and $396,568 of conversion cost charged to it during May. Its beginning inventory included $74,075 of direct materials cost and $28,493 of conversion cost.
Process cost summary Using FIFO method
Explanation / Answer
Materials Conversion % age complete Equivalent Units % age complete Equivalent Units Opening WIP 37500 40% 15000 60% 22500 Started and completed 150000 Closing WIP 51250 60% 30750 20% 10250 total units 187500 45750 32750 Costs 430960 368075 Cost per unit 9.42 11.24
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