Pet Products Company uses an automated process to manufacture its pet replica pr
ID: 2502401 • Letter: P
Question
Beginning work in process inventory
4,500 items, 1/4 complete
Units placed in production
15,000 units
Units completed
17,500 units
Ending work in process inventory
2,000 items, 3/4 complete
Cost of beginning work in process
$5,250
Direct material costs, current
$16,500
Conversion costs, current
$23,945
Direct materials are placed into production at the beginning of the process and conversion costs are incurred evenly throughout the process.
Required:
Prepare a production cost worksheet using the FIFO method.
Beginning work in process inventory
4,500 items, 1/4 complete
Units placed in production
15,000 units
Units completed
17,500 units
Ending work in process inventory
2,000 items, 3/4 complete
Cost of beginning work in process
$5,250
Direct material costs, current
$16,500
Conversion costs, current
$23,945
Explanation / Answer
Calculation of Equivalent Unit (as per FIFO Method) Unit Direct Material Conversion Cost % of Completion Equivalent Unit % of Completion Equivalent Unit Beginning WIP 4500 0% 0 75% 3375 Unit Started & Completed 13000 100% 13000 100% 13000 Closing WIP 2000 100% 2000 75% 1500 Total Equivalent Unit 15000 17875 Calculation of Cost per Equivalent Unit Total Equivalent Unit Cost per Equivalent Unit Direct Material 16500 15000 $ 1.10 Conversion Cost 23945 17875 $ 1.34 Calculation of total Cost Cost of Unit Transferred Cost of Beginning WIP $ 5,250.00 Add: Materail Cost Added $ 14,300.00 Add: Conversion Cost Added $ 21,935.63 Total Cost transferred out $ 41,485.63 Cost of Ending WIP Material Cost $ 2,200.00 Conversion Cost $ 2,009.37 Cost of Ending WIP $ 4,209.37
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