3 Jarvene Corporation uses the FIFO method in its process costing system. The fo

Question

3 Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company's processing departments: Unita in beginning inventory Unita atarted into production Unita in ending inventory Units transferred to the next departnent 390 4,320 270 4,440 Materials Conversior Percentage completion of beginning inventory Percentage eompletion of ending inventory 80% 40% The cost of beginning inventory according to the company's costing system was $7,846 of which $4,884 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $180,807. The costs per equivalent unit for the month were: Materials conversion Cost per equivalent unit $18.00 $23.00 Required: 1. Compute the total cost per equivalent unit for the month. 2. Compute the equivalent units of material and conversion in the ending inventory 3. Compute the equivalent units of material and conversion that were required to complete the beginning inventory. 4. Compute the number of units started and completed during the month. 5. Compute the cost of ending work in process inventory for materials, conversion, and in total for the month. 6. Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.

Explanation / Answer

Requirement 1 Total Cost per equivalent unit (18 +23) $ 41 per unit Requirement 2 Materials Conversion Equivalent units in the ending inventory                    216                      108 270X80% 270X40% Requirement 3 Materials Conversion Equivalent units - Beginning inventory                    273                      117 390X70% 390X30% Requirement 4 Number of units started and completed                4,050 4,320-270 Requirement 5 Materials Conversion Total Cost of ending work in process inventory                3,886                  2,490                  6,376 (216X17.99) (108X23.06) Requirement 6 Materials Conversion Total Total cost of units transferred out              79,876            1,02,386            1,82,262 (4440X17.99) (4440X23.06) Particulars Direct Materials Conversion Total Cost Units % completion Equivalent Units Cost Units % completion Equivalent Units Cost Begining Work in Process inventory                    390 70%                      273                 4,884             390 30%                         117            2,962 Processed During the month: Units Started                4,320 Begining Work in Process inventory                    390 30%                      117             390 70%                         273 Units Started & Completed in current month                4,050 100%                  4,050          4,050 100%                     4,050 Units Started & not Complete in current month                    270 80%                      216             270 40%                         108 Total Equivalent Units                  4,656               78,894                     4,548      1,01,913 Total Cost of Production               83,778      1,04,875      1,88,653 Costs per equivalent unit of production (83,778/4,656) 17.99 (104,875/4,548) 23.06

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