Long Island Rum accounts for production costs using the first in, first out (FIFO) method of process costing. Direct materials are all added at the beginning of production and conversion costs are incurred uniformly during production. In August, Long Island Rum had 10,100 units in beginning work-in-process that were 46 percent complete with respect to conversion costs. The company began production on another 15,900 units in August and had 5,600 units in ending work-in-process that were 75 percent complete with respect to conversion costs. Long Island Rum incurred $176,000 of direct materials costs and $38,000 of conversion costs in July for August's beginning work-in- process units. Long Island Rum incurred an additional $266,000 in direct materials costs and $196,000 in conversion costs in August. Required: Question a. What are the equivalent units of production for direct materials in August? Answer 15,900 units b.What is the total per-unit production cost for a unit completed in its entirety in August? Note: Do not round intermediate calculations. Round your final answer to 2 decimals. $ 26.56 c1. What are the total costs transferred out of production? Note: Do not round your intermediate calculations. Round your final answer to 2 decimals. c2. What is the total cost of ending work-in-process inventory? Note: Do not round your intermediate calculations. Round your final answer to 2 decimals.
Long Island Rum accounts for production costs using the first in, first out (FIFO) method of process costing. Direct materials are all added at the beginning of production and conversion costs are incurred uniformly during production. In August, Long Island Rum had 10,100 units in beginning work-in-process that were 46 percent complete with respect to conversion costs. The company began production on another 15,900 units in August and had 5,600 units in ending work-in-process that were 75 percent complete with respect to conversion costs. Long Island Rum incurred $176,000 of direct materials costs and $38,000 of conversion costs in July for August's beginning work-in- process units. Long Island Rum incurred an additional $266,000 in direct materials costs and $196,000 in conversion costs in August. Required: Question a. What are the equivalent units of production for direct materials in August? Answer 15,900 units b.What is the total per-unit production cost for a unit completed in its entirety in August? Note: Do not round intermediate calculations. Round your final answer to 2 decimals. $ 26.56 c1. What are the total costs transferred out of production? Note: Do not round your intermediate calculations. Round your final answer to 2 decimals. c2. What is the total cost of ending work-in-process inventory? Note: Do not round your intermediate calculations. Round your final answer to 2 decimals.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Long Island Rum accounts for production costs using the first in, first out (FIFO) method of process costing. Direct materials are all
added at the beginning of production and conversion costs are incurred uniformly during production.
In August, Long Island Rum had 10,100 units in beginning work-in-process that were 46 percent complete with respect to conversion
costs. The company began production on another 15,900 units in August and had 5,600 units in ending work-in-process that were 75
percent complete with respect to conversion costs.
Long Island Rum incurred $176,000 of direct materials costs and $38,000 of conversion costs in July for August's beginning work-in-
process units. Long Island Rum incurred an additional $266,000 in direct materials costs and $196,000 in conversion costs in August.
Required:
Question
a. What are the equivalent units of production for direct materials in August?
Answer
15,900 units
b.What is the total per-unit production cost for a unit completed in its entirety in August? Note:
Do not round intermediate calculations. Round your final answer to 2 decimals.
$
26.56
c1. What are the total costs transferred out of production? Note: Do not round your intermediate
calculations. Round your final answer to 2 decimals.
c2. What is the total cost of ending work-in-process inventory? Note: Do not round your
intermediate calculations. Round your final answer to 2 decimals.
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