lilliputian inc. produces dog food. all direct material is entered at the beginn
ID: 2435451 • Letter: L
Question
lilliputian inc. produces dog food. all direct material is entered at the beginning of the process. some shrinkage occurs during the production process,but management considers any shrinkage of less than 8% to be normal. october 2010 data are as follows:beginning wip inventory (45% complete as to conversion) 36,000 pounds
started during the month 120,000 pounds
transferred to fg inventory 126,000 pounds
ending wip inventory (15% complete as to conversion) 21,600 pounds
loss ? pounds
the following costs are associated with october production:
beginning wip inventory:
material 14,000
conversion 10,800 24,800
current period:
material 39,060
conversion 33,912 72,972
total cost to account for 97,772
prepare an october 2010 cost of production report for lillputian inc. using fifo process costing.
Explanation / Answer
Units to be accounted for work in progresss(beginning 45% complete for conversion) 36000 started(transferred)into production 120000 Total units 156000 Units accounted for Completed and transferred 126000 work in progress(ending) 21600 loss 8400 156000 production data physical units work added this Equivalent units period work in progress 36000 0 0 started and finished 90000 100% 90000 Work in progress(ending) 21600 100% 21600 147600 111600 production data physical units work added this Equivalent units period work in progress (beginning) 36000 55% 19800 started and completed 90000 100% 90000 work in progress(ending) 21600 15% 3240 147600 113040 Materials costs (14000+39060) 53060 conversion costs(10800+33912) 44712 Total costs 97772 Equivalent costs: Materials costs 53060 Equivalent units 111600 equivalent unit cost 0.475 conversion costs 44712 Equivalent units 113040 equivalent cost per unit 0.395 Total manufacturing cost per unit 0.475+0.395=$0.87 Total manufacturing cost per unit $0.87 Cost reconciliation schedule work in progress beginning 14000 cost to complete beginning work in process conversion costs19800*0.395 7821 units started and completed 90000 units@$.87 $78,303 work in progress(Ending) materials 21600*0.475 10368 conversions costs 3240*0.395 1280 $97,772
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