Chapter 20, Problem 6PSB

Problem 20-6B^AFIFO: Costs per equivalent unit; costs assigned to products C2 C4

Harson Co. manufactures a single product in two departments: Forming and Assembly. During May, the Forming department completed a number of units of a product and transferred them to Assembly. Of these transferred units, 62,500 were in process in the Forming department at the beginning of May and 175,000 were started and completed in May. May's Forming department beginning inventory units were 40% complete with respect to materials and 80% complete with respect to conversion. At the end of May, 76.250 additional units were in process in the Forming department and were 80% complete with respect to materials and 20% complete with respect to conversion. The Forming department had $683.750 of direct materials and $446,050 of conversion cost charged to it during May. Its beginning inventory included $99,075 of direct materials cost and $53,493 of conversion cost.

1. Compute the number of units transferred to Assembly.

2. Compute the number of equivalent units with respect to both materials used and conversion used in the Forming department for May using the FB70 method.

Check (2) EU P to r materials, 273,500

3. Compute the direct materials cost and the conversion cost per equivalent unit for the Forming department.

4. Using the FIFO method, assign the Forming department's May costs to the units transferred out and assign costs to its ending work in process inventory.