The Matsui Lubricants plant uses the FIFO method to account for its work-in-proc

Question

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day: Beginning WIP inventory Direct materials $ 980 Conversion costs 557 Current period costs Direct materials 26,600 Conversion costs 18,090 Quantity information is obtained from the manufacturing records and includes the following: Beginning inventory 800 units (60% complete as to materials, 50% complete as to conversion) Current period units started 5,900 units Ending inventory 1,500 units (40% complete as to materials, 15% complete as to conversion) 3.Award: 10 out of 20.00 points Required: (1) Compute the equivalent units for the materials and conversion cost calculations. (2) Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method. (Round your answers to 2 decimal places.) eBook & Resources eBook: Assign costs to products using first-in, first-out (FIFO) costing. References WorksheetDifficulty: 2 MediumLearning Objective: 08-05 Assign costs to products using first-in, first-out (FIFO) costing. 4.Award: 0 out of 30.00 points Compute the cost of goods transferred out and the ending inventory using the FIFO method. (Do not round intermediate calculations.)

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 800 Add: Units Started in Process 5,900 Total Units to account for: 6,700 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 800 Units started and completed 4,400 Ending Work in Process 1,500 Total Units to be accounted for: 6,700 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 40% 320 50% 400 Units started and completed 100% 4,400 100% 4,400 Ending Work in Process 40% 600 15% 225 Total Equivalent units 5,320 5,025 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 26,600 18,090 Equivalent Units 5,320 5,025 Cost per Equivalent unit 5 3.6 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (800 units) Equivalent unit Cost per EU Total Cost Beginning Cost 1537 Material 320 5 1600 Conversion Cost 400 3.6 1440 Cost of units completed from Beg WIP 4577 Units started and Transferred out (4400 units) Equivalent unit Cost per EU Total Cost Material 4,400 5 22000 Conversion Cost 4,400 3.6 15840 Total Cost of Units started and completed: 37840 Ending Work in process (1500 units) Equivalent unit Cost per EU Total Cost Material 600 5 3000 Conversison Cost 225 3.6 810 Total cost of Ending Work in process: 3,810

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