How do you solve this Accounting problem? He wants a FIFO report that lines up w
ID: 2502477 • Letter: H
Question
How do you solve this Accounting problem? He wants a FIFO report that lines up with the Given check Figures
The company is going threw two processes the folloswint activity was recorded in in March:
Production data:
Units in process, March 1; conversion 60% complete........7,000
units started into production................................................250,000
Units in process, March 31; conversion 90% complete.......10,000
Cost Data:
Work in process inventory, March 1:
Materials cost ................................9,000
Conversion Cost............................4,000
Cost added during the month
Material Cost..................................320,000
Conversion cost..............................259,354
All materials are added at the beginning of work. Conversion costs are added uniformly during processing. the company uses the FIFO method.
Check Figures are: Conversion: 1.03 per EU
3/31 EB WIP 22,070
Explanation / Answer
PARTICULARS
INPUT
OUTPUT
MATERIAL
%
COVERSION COST
%
OPENING WIP
7000
UNITS STARTED INTO PRODUCTION
250000
CLOSING WIP
(10000)
UNITS COMPLETED DURING THE YEAR
247000
OPENING WIP COMPLETED
7000
7000*0%
= 0
0%
7000*40%
= 2800
40%
UNITS STARTED &COMPLETED
=247000-7000
= 240000
240000*100%
= 240000
100%
240000*100%
= 240000
100%
CLOSING WIP
10000
10000*100%
= 10000
100%
10000*90%
=9000
90%
TOTAL EQUIVALENT UNITS
250000
251800
COST
320000
259354
COST PER UNIT
320000/250000
=1.28 P.U.
259354/251800
=1.03 P.U.
VALUE OF ENDING WIP = 10000*1.28 + 9000*1.03
=12800 + 9270
=22070
PARTICULARS
INPUT
OUTPUT
MATERIAL
%
COVERSION COST
%
OPENING WIP
7000
UNITS STARTED INTO PRODUCTION
250000
CLOSING WIP
(10000)
UNITS COMPLETED DURING THE YEAR
247000
OPENING WIP COMPLETED
7000
7000*0%
= 0
0%
7000*40%
= 2800
40%
UNITS STARTED &COMPLETED
=247000-7000
= 240000
240000*100%
= 240000
100%
240000*100%
= 240000
100%
CLOSING WIP
10000
10000*100%
= 10000
100%
10000*90%
=9000
90%
TOTAL EQUIVALENT UNITS
250000
251800
COST
320000
259354
COST PER UNIT
320000/250000
=1.28 P.U.
259354/251800
=1.03 P.U.
VALUE OF ENDING WIP = 10000*1.28 + 9000*1.03
=12800 + 9270
=22070
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