The assembly division of Stiles Watches, Inc. uses the FIFO method of process costing. Consider the following data for the month of May 2017: Requirement Summarize the total costs to account for, calculate the cost per equivalent unit for direct materials and conversion costs, and assign costs to units completed (and transferred out) and to units in ending work in process. Begin by summarizing the total costs to account for. Total Direct Conversion Production Costs Materials Costs (1) (2) Total costs to account for Next, calculate cost per equivalent unit for direct materials and conversion costs. Direct Conversion Materials Costs (3) Divide by (4) Cost per equivalent unit Finally, assign total costs to units completed (and transferred out) and to units in ending work in process (WIP). Begin by calculating the total from beginning inventory, then calculate the total costs accounted for. Total Direct Conversion Production Costs Materials Costs Completed and transferred out: (5) (6) Total from beginning inventory (7) Total costs of units completed and transferred out (8) Total costs accounted for 1: Data Table Physical Units Direct Conversion (Watches) Materials Costs Beginning work in process (May 1)a 60 $249,750 $100,400 Started in May 2017 478 Completed during May 2017 443 Ending work in process (May 31)b 95 Total costs added during May 2017 $2,598,000 $1,251,600 a Degree of completion: direct materials, 80%; conversion costs, 25%. b Degree of completion: direct materials, 40%; conversion costs, 20%. 2: Reference Equivalent Units Direct Conversion Flow of Production Materials Costs Completed and transferred out during current period: From beginning work in process 12 45 Started and completed 383 383 Work in process, ending 38 19 Equivalent units of work done in current period 433 447

The assembly division of Stiles Watches, Inc. uses the FIFO method of process costing. Consider the following data for the month of May 2017: Requirement Summarize the total costs to account for, calculate the cost per equivalent unit for direct materials and conversion costs, and assign costs to units completed (and transferred out) and to units in ending work in process. Begin by summarizing the total costs to account for. Total Direct Conversion Production Costs Materials Costs (1) (2) Total costs to account for Next, calculate cost per equivalent unit for direct materials and conversion costs. Direct Conversion Materials Costs (3) Divide by (4) Cost per equivalent unit Finally, assign total costs to units completed (and transferred out) and to units in ending work in process (WIP). Begin by calculating the total from beginning inventory, then calculate the total costs accounted for. Total Direct Conversion Production Costs Materials Costs Completed and transferred out: (5) (6) Total from beginning inventory (7) Total costs of units completed and transferred out (8) Total costs accounted for 1: Data Table Physical Units Direct Conversion (Watches) Materials Costs Beginning work in process (May 1)a 60 $249,750 $100,400 Started in May 2017 478 Completed during May 2017 443 Ending work in process (May 31)b 95 Total costs added during May 2017 $2,598,000 $1,251,600 a Degree of completion: direct materials, 80%; conversion costs, 25%. b Degree of completion: direct materials, 40%; conversion costs, 20%. 2: Reference Equivalent Units Direct Conversion Flow of Production Materials Costs Completed and transferred out during current period: From beginning work in process 12 45 Started and completed 383 383 Work in process, ending 38 19 Equivalent units of work done in current period 433 447

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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The assembly division of Stiles Watches, Inc. uses the FIFO method of process costing. Consider the following data for the month of May

2017:

Requirement

Summarize the total costs to account for, calculate the cost per equivalent unit for direct materials and conversion costs, and assign costs to units completed (and transferred out) and to units in ending work in process.

Begin by summarizing the total costs to account for.

	Total	Direct	Conversion
	Production Costs	Materials	Costs
(1)
(2)
Total costs to account for

Next, calculate cost per equivalent unit for direct materials and conversion costs.

		Direct	Conversion
		Materials	Costs
(3)
Divide by	(4)
Cost per equivalent unit

Finally, assign total costs to units completed (and transferred out) and to units in ending work in process (WIP). Begin by calculating the total from beginning inventory, then calculate the total costs accounted for.

	Total	Direct	Conversion
	Production Costs	Materials	Costs
Completed and transferred out:
(5)
(6)
Total from beginning inventory

(7)
Total costs of units completed and transferred out
(8)
Total costs accounted for

1: Data Table

	Physical Units	Direct	Conversion
	(Watches)	Materials	Costs

Beginning work in process (May 1)a	60	$249,750	$100,400
Started in May 2017	478
Completed during May 2017	443
Ending work in process (May 31)b	95
Total costs added during May 2017		$2,598,000	$1,251,600

a Degree of completion: direct materials, 80%; conversion costs, 25%.

b Degree of completion: direct materials, 40%; conversion costs, 20%.

2: Reference

	Equivalent Units
	Direct	Conversion
Flow of Production	Materials	Costs
Completed and transferred out during current period:
From beginning work in process	12	45
Started and completed	383	383
Work in process, ending	38	19
Equivalent units of work done in current period	433	447

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