Lalo Corporation is a manufacturer that uses a process cost accounting system. r
ID: 2428016 • Letter: L
Question
Lalo Corporation is a manufacturer that uses a process cost accounting system. records for the month of January of the current year show the following. Its accounting Beginning Inventory (3,000 units) Direct Materials Cost 4,500 Conversion Costs (60% complete) 12,000 35,000 Units Started During Month Units Completed During Month 33,500 Current Period Costs: 55,000 175,000 Direct Materials Cost Conversion Costs Ending Inventory (70% complete as to conversion costs) Direct materials are added in the following manner: 80% at the very beginning of the process and 20% a t the very end of the process. Conversion costs are added evenly throughout the process. hod, prepare a REQUIRED: (1) Using the attached sheets and the FIFO process costing met cost of production report for the month of January. Round all costs per equivalent unit to four decimal places and all other dollar amounts to the nearest whole dollar. Using the attached s Using the attached sheets and the weighted average process costing methood, prepare a cost of production report for the month of January. Round all costs per equivalent unit to four decimal places and all other dollar amounts to the (2)Explanation / Answer
LALO Corporation
Schedule of physical and equivalent units - FIFO method for month of January
Particulars physical units Equivalent units
Directmaterials Conversion
Units to account for:
Begining WIP inventory 3000 - 1200
Units started during period 35000 35000 35000
Total units 38000
Units accounted for:
Units completed during period 33500 33500 33500
From begining WIP inventory 3000 - 1200
Units started and completed during period 33500 33500 33500
Total units completed during period 33500 34700
Units in ending WIP inventory 1500 - 1050
Total units accounted for 33500 35750
LALO Corporation
Schedule of units cost analysis - FIFO method for month of January
Particulars Direct materials Conversion Total
Costs to account for:
Costs from begining WIP inventory 4500 12000 16500
Current period cost 55000 195000 250000
Total cost to account for: 59500 207000 266500
Equivalent units : 33500 35750
Cost per equivalent unit 59500/33500=1.78 207000/35750=5.79
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