Annin Laboratories uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for February: Beginning WIP inventory Direct materials $ 24,553 Conversion costs 8,005 Current period costs Direct materials 145,832 Conversion costs 72,740 Quantity information is obtained from the manufacturing records and includes the following: Beginning inventory 6,000 units (40% complete as to materials, 15% complete as to conversion) Current period units started 44,800 units Ending inventory 19,000 units (75% complete as to materials, 35% complete as to conversion) Required: Compute the equivalent units for the materials and conversion cost calculations. Compute the cost per equivalent unit for direct materials and for conversion costs for February using the FIFO method.
Annin Laboratories uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for February: Beginning WIP inventory Direct materials $ 24,553 Conversion costs 8,005 Current period costs Direct materials 145,832 Conversion costs 72,740 Quantity information is obtained from the manufacturing records and includes the following: Beginning inventory 6,000 units (40% complete as to materials, 15% complete as to conversion) Current period units started 44,800 units Ending inventory 19,000 units (75% complete as to materials, 35% complete as to conversion) Required: Compute the equivalent units for the materials and conversion cost calculations. Compute the cost per equivalent unit for direct materials and for conversion costs for February using the FIFO method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Annin Laboratories uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for February:
| Beginning WIP inventory | |
|---|---|
| Direct materials | $ 24,553 |
| Conversion costs | 8,005 |
| Current period costs | |
| Direct materials | 145,832 |
| Conversion costs | 72,740 |
Quantity information is obtained from the manufacturing records and includes the following:
| Beginning inventory | 6,000 | units | (40% complete as to materials, 15% complete as to conversion) |
|---|---|---|---|
| Current period units started | 44,800 | units | |
| Ending inventory | 19,000 | units | (75% complete as to materials, 35% complete as to conversion) |
Required:
- Compute the equivalent units for the materials and conversion cost calculations.
- Compute the cost per equivalent unit for direct materials and for conversion costs for February using the FIFO method.
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