amar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 32,400 units, and transferred 34,200 units of product to the Assembly department. Its 5,400 units of beginning work in process consisted of $92,880 of direct materials and $768,708 of conversion costs. It has 3,600 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $784,080 of direct materials costs and $3,495,492 of conversion costs were charged to the Forming department. The following additional information is available for the Forming department. Beginning work in process consisted of 5,400 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion. Of the 34,200 units transferred out, 5,400 were from beginning work in process. The remaining 28,800 were units started and completed during May.  Assume that Tamar uses the FIFO method to account for its process costing system.

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Problem 20-5AA FIFO: Process cost summary; equivalent units; cost estimates LO C3, C4, P4

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Tamar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 32,400 units, and transferred 34,200 units of product to the Assembly department. Its 5,400 units of beginning work in process consisted of $92,880 of direct materials and $768,708 of conversion costs. It has 3,600 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $784,080 of direct materials costs and $3,495,492 of conversion costs were charged to the Forming department. The following additional information is available for the Forming department.

  • Beginning work in process consisted of 5,400 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion.
  • Of the 34,200 units transferred out, 5,400 were from beginning work in process. The remaining 28,800 were units started and completed during May.

 Assume that Tamar uses the FIFO method to account for its process costing system.

 

Equivalent units of production (EUP)- FIFO method
Units
% Materials
EUP- Materials
% Conversion EUP- Conversion
Beginning work in process inventory - units
5,400
0%
60%
3,240
Units started and completed this period
28,800
100%
28,800
100%
28,800
Ending work in process - units
3,600
100%
3,600
80%
2,880
Total units
34,200
32,400
34,920
Cost per equivalent unit of production
Materials
Conversion
Costs incurred this period
$
784,080
3,495,492
Total costs
Costs
$
784,080
Costs
$
3,495,492
- Equivalent units of production
EUP
32,400
EUP
34,920
Cost per equivalent unit of production (rounded to 2 decimals)
$
24.20
$
100.10
Total costs accounted for:
Beginning Inventory Cost:
Cost per
EUP
Cost to complete beginning inventory
EUP
Total cost
Direct materials
$
24.20
$
Conversion
3,240
$
100.10
324,324
Total cost to complete beginning inventory
324,324
Total cost of units in beginning inventory
324,324
Cost per
Cost of units started and completed
EUP
Total cost
EUP
Direct materials
28,800
$
24.20
$
696,960
Conversion
28,800
$
100.10
2,882,880
Total cost of units started and completed
3,579,840
Transcribed Image Text:Equivalent units of production (EUP)- FIFO method Units % Materials EUP- Materials % Conversion EUP- Conversion Beginning work in process inventory - units 5,400 0% 60% 3,240 Units started and completed this period 28,800 100% 28,800 100% 28,800 Ending work in process - units 3,600 100% 3,600 80% 2,880 Total units 34,200 32,400 34,920 Cost per equivalent unit of production Materials Conversion Costs incurred this period $ 784,080 3,495,492 Total costs Costs $ 784,080 Costs $ 3,495,492 - Equivalent units of production EUP 32,400 EUP 34,920 Cost per equivalent unit of production (rounded to 2 decimals) $ 24.20 $ 100.10 Total costs accounted for: Beginning Inventory Cost: Cost per EUP Cost to complete beginning inventory EUP Total cost Direct materials $ 24.20 $ Conversion 3,240 $ 100.10 324,324 Total cost to complete beginning inventory 324,324 Total cost of units in beginning inventory 324,324 Cost per Cost of units started and completed EUP Total cost EUP Direct materials 28,800 $ 24.20 $ 696,960 Conversion 28,800 $ 100.10 2,882,880 Total cost of units started and completed 3,579,840
Total costs to account for:
Costs incurred this period
Cost of beginning work in process
Total costs to account for:
$
Total costs accounted for
4,279,572
Difference due to rounding cost/unit
$ (4,279,572)
Unit reconciliation:
Units to account for:
Beginning work in process inventory - units
5,400
Units started this period
32,400
Total units to account for
37,800
Total units accounted for:
Units completed and transferred out
34,200
Ending work in process - units
3,600
Total units accounted for
37,800
Transcribed Image Text:Total costs to account for: Costs incurred this period Cost of beginning work in process Total costs to account for: $ Total costs accounted for 4,279,572 Difference due to rounding cost/unit $ (4,279,572) Unit reconciliation: Units to account for: Beginning work in process inventory - units 5,400 Units started this period 32,400 Total units to account for 37,800 Total units accounted for: Units completed and transferred out 34,200 Ending work in process - units 3,600 Total units accounted for 37,800
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