Chapter 20, Problem 6APSA

To determine

Introduction:

In Process costing organization has option of using FIFO basis or weighted average basis for determining equivalent units and the cost.

To Calculate:

To calculate the number of units transferred to Finished Goods

Answer to Problem 6APSA

Solution:

187500 units (37500 from opening and 150000 started and completed ) were completed and transferred to Finished Goods.

Explanation of Solution

Explanation:

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $
OPENING BALANCE	37,500	60%	22,500	74,075
COST INCURRED DURING THE MONTH				505,035
				579,110
OPENING UNITS COMPLETED AND TRANSFERRED	37,500	40%	15,000
UNITS COMPLETED AND TRANSFERRED	150,000	100%	150,000
CLOSING WORK IN PROGRESS	51,250	60%	30,750
			195,750
Per Unit cost of Equivalent units				2.58
COST OF OPENING UNITS			15,000	112,775.00
COST OF UNITS COMPLETED AND TRANSFERRED				387,000
COST OF WORK IN PROGRESS				79,335
TOTAL				579,110
		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST
OPENING BALANCE	37,500	40%	15,000	28,493	102,568
COST INCURRED DURING THE MONTH				396,568	901,603
				425,061	1,004,171
OPENING UNITS COMPLETED AND TRANSFERRED	37,500	60%	22,500
UNITS COMPLETED AND TRANSFERRED	150,000	100%	150,000
WORK IN PROGRESS	51,250	20%	10,250
			182,750
Per Unit cost of Equivalent units			=396568/182750	2.17
OPENING UNITS COMPLETED AND TRANSFERRED				77,318	190,093
COST OF UNITS COMPLETED AND TARNSFERRED				325,500	712,500
COST OF WORK IN PROGRESS				22,243	101,578
TOTAL				425,061	1,004,171

Conclusion

Conclusion:

Number of units transferred to Finished Goods were 187500 units.

To determine

Introduction:

In Process costing organization has option of using FIFO basis or weighted average basis for determining equivalent units and the cost.

To Calculate:

To Calculate the number of Equivalent units with respect to Direct Material and Conversion.

Answer to Problem 6APSA

Solution:

Equivalent units produced for the month of May using FIFO method were 195750 units from material perspective and 182750 units from Conversion perspective.

Explanation of Solution

Explanation:

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $
OPENING BALANCE	37,500	60%	22,500	74,075
COST INCURRED DURING THE MONTH				505,035
				579,110
OPENING UNITS COMPLETED AND TRANSFERRED	37,500	40%	15,000
UNITS COMPLETED AND TRANSFERRED	150,000	100%	150,000
CLOSING WORK IN PROGRESS	51,250	60%	30,750
			195,750
Per Unit cost of Equivalent units				2.58
COST OF OPENING UNITS			15,000	112,775.00
COST OF UNITS COMPLETED AND TRANSFERRED				387,000
COST OF WORK IN PROGRESS				79,335
TOTAL				579,110
		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST
OPENING BALANCE	37,500	40%	15,000	28,493	102,568
COST INCURRED DURING THE MONTH				396,568	901,603
				425,061	1,004,171
OPENING UNITS COMPLETED AND TRANSFERRED	37,500	60%	22,500
UNITS COMPLETED AND TRANSFERRED	150,000	100%	150,000
WORK IN PROGRESS	51,250	20%	10,250
			182,750
Per Unit cost of Equivalent units			=396568/182750	2.17
OPENING UNITS COMPLETED AND TRANSFERRED				77,318	190,093
COST OF UNITS COMPLETED AND TARNSFERRED				325,500	712,500
COST OF WORK IN PROGRESS				22,243	101,578
TOTAL				425,061	1,004,171

Conclusion

Conclusion:

	Direct Material	Conversion
Number of Equivalent units on FIFO basis during May	195750	182750

To determine

Introduction:

In Process costing organization has option of using FIFO basis or weighted average basis for determining equivalent units and the cost.

To Calculate:

To Calculate per Equivalent units cost with respect to Direct Material and Conversion.

Answer to Problem 6APSA

Solution:

	Direct Material	Conversion
Cost per Equivalent units on FIFO basis during May	2.58	2.17

Explanation of Solution

Explanation:

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $
OPENING BALANCE	37,500	60%	22,500	74,075
COST INCURRED DURING THE MONTH				505,035
				579,110
OPENING UNITS COMPLETED AND TRANSFERRED	37,500	40%	15,000
UNITS COMPLETED AND TRANSFERRED	150,000	100%	150,000
CLOSING WORK IN PROGRESS	51,250	60%	30,750
			195,750
Per Unit cost of Equivalent units				2.58
COST OF OPENING UNITS			15,000	112,775.00
COST OF UNITS COMPLETED AND TRANSFERRED				387,000
COST OF WORK IN PROGRESS				79,335
TOTAL				579,110
		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST
OPENING BALANCE	37,500	40%	15,000	28,493	102,568
COST INCURRED DURING THE MONTH				396,568	901,603
				425,061	1,004,171
OPENING UNITS COMPLETED AND TRANSFERRED	37,500	60%	22,500
UNITS COMPLETED AND TRANSFERRED	150,000	100%	150,000
WORK IN PROGRESS	51,250	20%	10,250
			182,750
Per Unit cost of Equivalent units			=396568/182750	2.17
OPENING UNITS COMPLETED AND TRANSFERRED				77,318	190,093
COST OF UNITS COMPLETED AND TARNSFERRED				325,500	712,500
COST OF WORK IN PROGRESS				22,243	101,578
TOTAL				425,061	1,004,171

Conclusion

Conclusion:

Direct material cost per equivalent unit during may is $ 2.58

Conversion cost per equivalent unit during may is $ 2.17

To determine

Introduction:

In Process costing organization has option of using FIFO basis or weighted average basis for determining equivalent units and the cost.

To Calculate:

To Assign cost to Units transferred to FG and to ending WIP.

Answer to Problem 6APSA

Solution:

	Cost Assigned to FG	Cost Assigned to WIP
Cost Assigned in May	902593	101578

Explanation of Solution

Explanation:

PROCESS COST SUMMARY (FIFO BASIS)
		DIRECT MATERIAL
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST $
OPENING BALANCE	37,500	60%	22,500	74,075
COST INCURRED DURING THE MONTH				505,035
				579,110
OPENING UNITS COMPLETED AND TRANSFERRED	37,500	40%	15,000
UNITS COMPLETED AND TRANSFERRED	150,000	100%	150,000
CLOSING WORK IN PROGRESS	51,250	60%	30,750
			195,750
Per Unit cost of Equivalent units				2.58
COST OF OPENING UNITS			15,000	112,775.00
COST OF UNITS COMPLETED AND TRANSFERRED				387,000
COST OF WORK IN PROGRESS				79,335
TOTAL				579,110
		CONVERSION COST			TOTAL MATERIAL AND CONVERSION
DETAILS	NO OF UNITS	% COMPLETE	EQUIVALENT UNIT	COST
OPENING BALANCE	37,500	40%	15,000	28,493	102,568
COST INCURRED DURING THE MONTH				396,568	901,603
				425,061	1,004,171
OPENING UNITS COMPLETED AND TRANSFERRED	37,500	60%	22,500
UNITS COMPLETED AND TRANSFERRED	150,000	100%	150,000
WORK IN PROGRESS	51,250	20%	10,250
			182,750
Per Unit cost of Equivalent units			=396568/182750	2.17
OPENING UNITS COMPLETED AND TRANSFERRED				77,318	190,093
COST OF UNITS COMPLETED AND TARNSFERRED				325,500	712,500
COST OF WORK IN PROGRESS				22,243	101,578
TOTAL				425,061	1,004,171

Conclusion

Conclusion:

Costs assigned during May in FIFO basis were as under:

	Direct Material	Conversion	Total
Units completed and Transferred	499775	402818	902593
Work In Progress	79335	22243	101578