1.
To compute: Number of units transferred to finished goods inventory.
1.

Explanation of Solution
Given,
Work in process (opening) is 37,500 units.
Units started and completed this month are 150,000 units.
Formula to calculate units transferred to finished goods,
Substitute 37,500 units for work in process (opening) and 150,000 units for units started and completed this month.
Hence, units transferred to finished goods are 187,500 units.
2.
To compute: Equivalent unit of production according to FIFO method.
2.

Explanation of Solution
For direct material
Given,
Work in progress (beginning) is 15,000 units.
Completed goods are 150,000 units.
Work in progress (end) is 30,750 units.
Formula to calculate equivalent unit of production (direct material),
Substitute 15,000 units for work in progress (beginning), 150,000 units for completed goods and 30,750 units for work in progress (end).
Hence, equivalent unit of production (direct material) is 195,750 units.
Working notes:
Calculation for work in progress (beginning),
Calculation for work in progress (end),
For Conversion:
Given,
Work in progress (beginning) is 22,500 units.
Completed goods are 150,000 units.
Work in progress (end) is 10,250 units.
Formula to calculate equivalent unit of production (conversion),
Substitute 22,500 units for work in progress (beginning), 150,000 units for completed goods and 10,250 units for work in progress (end).
Hence, equivalent unit of production (Conversion) is 182,750 units.
Working notes:
Calculation for work in progress (beginning),
Calculation for work in progress (end),
3.
To compute: Cost per equivalent unit of production.
3.

Explanation of Solution
For direct material:
Given,
Total direct material cost is $505,035.
Total EUP (Direct Material) is 195,750 units.
Formula to calculate cost per equivalent unit of production,
Substitute, $505,035 for total direct material cost and 195,750 units for total EUP (direct material) in the above equation.
Hence, cost per EUP (direct material) is $2.58.
For conversion:
Given,
Total conversion cost is $396,568.
Total EUP (Conversion) is 182,750 units.
Formula to calculate cost per equivalent unit of production,
Substitute, $396,568 for total conversion cost and 182,750 units for total EUP (Conversion) in the above equation.
Hence, cost per EUP (conversion) is $2.17.
4.
To prepare: Cost assignment to finished and work in process (ending).
4.

Explanation of Solution
Prepare production cost summary:
T. Company-Production Department | ||
Assign Cost (FIFO method) | ||
For the month ended May 31, 20XX | ||
Cost Assignment | Amount ($) | Amount ($) |
Cost of units completed and transferred out | ||
Cost of work in process (beginning) | ||
Direct Material | 74,075 | |
Conversion | 28,493 | 102,568 |
Cost to complete work in process (beginning) | ||
Direct Material | 38,700 | |
Conversion | 48,825 | 87,525 |
Cost of started and completed units | ||
Direct materials | 387,000 | |
Conversion | 325,500 | 712,500 |
Total cost of units finished during this period | 902,593 | |
Cost of work in process (ending) | ||
Direct materials | 79,335 | |
Conversion | 22,243 | 101,578 |
Total cost | 1,004,171 |
Hence, total cost of transferred goods and work in process (ending) is $902,593 and $101,578 respectively.
Working notes:
Calculation to complete work in process (beginning),
Calculation for direct material,
Calculation for conversion,
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Chapter 11 Solutions
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