In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock. Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP. Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations. To Calculate: To prepare process cost summary following FIFO method.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 20, Problem 5APSA

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

To prepare process cost summary following FIFO method.

Expert Solution

Explanation of Solution

Solution and Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Process cost summary based on FIFO method is given above.

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

Prepare the Journal Entry to transfer the completed units of Finished Goods Inventory.

Expert Solution

Answer to Problem 5APSA

Solution:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Explanation of Solution

Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Expand upon it and add more info

JH, Inc., is a calendar year, accrual basis corporation with Joe as its sole shareholder (basis in his stock is $90,000). On January 1 of the current year, JH Corporation has accumulated E & P of $200,000. Before considering the effect of the distribution described below, the corporation’s current E & P is $50,000. On November 1, JH distributes an office building to Joe. The office building has an adjusted basis of $80,000 (fair market value of $100,000) and is subject to a mortgage of $110,000. Assume that the building has been depreciated using the ADS method for both income tax and E & P purposes. What are the tax consequences of the distribution to JH and to Joe? (In your answer, be sure to describe the effects on taxable income for both JH and Joe, the impact of the distribution on JH’s E & P, and Joe’s basis in the building.)

Joe is the sole shareholder of JH Corporation. Joe sold his stock to Ethan on October 31 for $150,000. Joe’s basis in JH stock was $50,000 at the start of the year. JH distributed land to Joe immediately before the sale. JH’s basis in the land was $20,000 (fair market value of $25,000). On December 31, Ethan received a $75,000 cash distribution from JH. During the year, JH has $20,000 of current E & P and its accumulated E & P balance on January 1 is $10,000. Which of the following statements is true? a. Joe recognizes a $110,000 gain on the sale of his stock. b. Joe recognizes a $100,000 gain on the sale of his stock. c. Ethan receives $5,000 of dividend income.d. Joe receives $20,000 of dividend income. e. None of the above.

Answer 2

Question

Chapter 20, Problem 5APSA

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

To prepare process cost summary following FIFO method.

Expert Solution

Explanation of Solution

Solution and Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Process cost summary based on FIFO method is given above.

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

Prepare the Journal Entry to transfer the completed units of Finished Goods Inventory.

Expert Solution

Answer to Problem 5APSA

Solution:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Explanation of Solution

Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 20, Problem 5APSA

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

To prepare process cost summary following FIFO method.

Expert Solution

Explanation of Solution

Solution and Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Process cost summary based on FIFO method is given above.

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

Prepare the Journal Entry to transfer the completed units of Finished Goods Inventory.

Expert Solution

Answer to Problem 5APSA

Solution:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Explanation of Solution

Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 20, Problem 5APSA

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

To prepare process cost summary following FIFO method.

Expert Solution

Explanation of Solution

Solution and Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Process cost summary based on FIFO method is given above.

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

Prepare the Journal Entry to transfer the completed units of Finished Goods Inventory.

Expert Solution

Answer to Problem 5APSA

Solution:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Explanation of Solution

Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 20, Problem 5APSA

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

To prepare process cost summary following FIFO method.

Expert Solution

Explanation of Solution

Solution and Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Process cost summary based on FIFO method is given above.

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

Prepare the Journal Entry to transfer the completed units of Finished Goods Inventory.

Expert Solution

Answer to Problem 5APSA

Solution:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Explanation of Solution

Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Answer 6

Chapter 20, Problem 5APSA

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

To prepare process cost summary following FIFO method.

Expert Solution

Explanation of Solution

Solution and Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Process cost summary based on FIFO method is given above.

Answer 7

Chapter 20, Problem 5APSA

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

To prepare process cost summary following FIFO method.

Answer 8

Expert Solution

Explanation of Solution

Solution and Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Conclusion

Conclusion:

Process cost summary based on FIFO method is given above.

Answer 13

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

Prepare the Journal Entry to transfer the completed units of Finished Goods Inventory.

Expert Solution

Answer to Problem 5APSA

Solution:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Explanation of Solution

Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480

Conclusion

Conclusion:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Answer 14

To determine

Introduction:

In process cost summary – we are calculating the cost of producing each unit of item produced. We can use FIFO or Weighted Average Method, In FIFO method opening inventory and its degree of valuation and its associated cost is used as it is. Only current month cost is allocated to units completed during the month – either from opening WIP or from units introduced and completed during the month or units in closing stock.

Equivalent units in FIFO method are calculated based on the degree of completion of Opening units of WIP.

Cost estimate – Estimation of Work in progress quantity and degree of completion are very challenging in process industries which have 24*7 nature of operations.

To Calculate:

Prepare the Journal Entry to transfer the completed units of Finished Goods Inventory.

Answer 15

Expert Solution

Answer to Problem 5APSA

Solution:

Journal entry is as follows:

Account Head	$	$
Finished Goods Inventory	2,667,840
Production cost account		2.667,840
Finished Goods transferred from Production process cost account

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Explanation:


TAMAR CO.

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $

OPENING BALANCE	3,000	100%	3,000	19,800

COST INCURRED DURING THE MONTH				496,800
				516,600
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	0%	-
UNITS COMPLETED AND TRANSFERRED	19,200	100%	19,200
CLOSING WORK IN PROGRESS	2,400	100%	2,400
			21,600

Per Unit cost of Equivalent units				23.00

COST OF OPENING UNITS				19,800
COST OF UNITS COMPLETED AND TRANSFERRED				441,600
COST OF WORK IN PROGRESS				55,200
TOTAL				516,600


		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST	TOTAL MATERIAL AND CONVERSION

OPENING BALANCE	3,000	40%	1,200	221,940	241,740

COST INCURRED DURING THE MONTH				2,165,940	2,662,740
				2,387,880	2,904,480
OPENING UNITS COMPLETED AND TRANSFERRED	3,000	60%	1,800
UNITS COMPLETED AND TRANSFERRED	22,200	100%	19,200
WORK IN PROGRESS	2,400	80%	1,920
			22,920

Per Unit cost of Equivalent units			=2165940/22920	94.50

OPENING UNITS COMPLETED AND TRANSFERRED				392,040	411,840
COST OF UNITS COMPLETED AND TARNSFERRED				1,814,400	2,256,000
COST OF WORK IN PROGRESS				181,440	236,640
TOTAL				2,387,880	2,904,480