The data provided below is the same for each item in a set of interrelated items about the FIFO approach to processes costing. Only the question asked tends to differ from item to item. Together this set of items addresses the same problem. Students are encouraged to work the ENTIRE problem out on scratch paper before responding to any items that relate to this problem. Knuckle makes t-shirts. It uses the FIFO approach to process costing and has a single-stage Work-In-Process department. Materials costs are put into the product at the start of production. Conversion costs (labor and overhead) go into the product gradually as the product is worked on. During March, 20,000 t-shirts were completed and transferred to finished goods storage. At the end of March, there were 4000 t-shirts that were 100% complete as to materials and 50% complete as to conversion still in Work-In-Process. At the beginning of March, there were 2000 t-shirts that were 100% complete as to materials and 25% complete as to conversion. Beginning inventory for March had a cost of $12,600 for materials and $3,300 for conversion and all of those costs had been put into those partially completed beginning inventory units during February. Costs this period (during March) were $132,000 for materials and $86,000 for conversion. If Knuckle had elected to use the Weighted Average Method of Process Costing instead of the FIFO method, the total equivalent units for materials and conversion respectively would have been: 26,000 and 22,500 22,000 and 22,000 144,600 and 89,300 6.025 and 4.059 24,000 and 22,000

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Description: The data provided below is the same for each item in a set of interrelated items about the FIFO approach to processes costing. Only the question asked tends to differ from item to item. Together this set of items addresses the same problem. Students

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The data provided below is the same for each item in a set of interrelated items about the FIFO approach to processes costing. Only the question asked tends to differ from item to item. Together this set of items addresses the same problem. Students are encouraged to work the ENTIRE problem out on scratch paper before responding to any items that relate to this problem. Knuckle makes t-shirts. It uses the FIFO approach to process costing and has a single-stage Work-In-Process department. Materials costs are put into the product at the start of production. Conversion costs (labor and overhead) go into the product gradually as the product is worked on. During March, 20,000 t-shirts were completed and transferred to finished goods storage. At the end of March, there were 4000 t-shirts that were 100% complete as to materials and 50% complete as to conversion still in Work-In-Process. At the beginning of March, there were 2000 t-shirts that were 100% complete as to materials and 25% complete as to conversion. Beginning inventory for March had a cost of $12,600 for materials and $3,300 for conversion and all of those costs had been put into those partially completed beginning inventory units during February. Costs this period (during March) were $132,000 for materials and $86,000 for conversion. If Knuckle had elected to use the Weighted Average Method of Process Costing instead of the FIFO method, the total equivalent units for materials and conversion respectively would have been:

26,000 and 22,500

22,000 and 22,000

144,600 and 89,300

6.025 and 4.059

24,000 and 22,000

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