Mullins Corporation uses the FIFO method in its process costing system. Data con
ID: 2329904 • Letter: M
Question
Mullins Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below Beginning work in process inventory Units in beginning work in process inventory Materials costs Conversion costs Percent complete with respect to materials Percent complete with respect to conversion 1,700 $13,500 23,200 758 658 Units started into production during the month Units transferred to the next departnent during the month Materials costs added during the month Conversion costs added during the month Ending vork in process inventory 10, 600 9,800 $179,300 $368,500 Units in ending work in process inventory Percent complete with respect to materiale Percent conplete with respect to conversion 2,500 65 50 The cost of a completed unit transferred out of the department is closest to: (Round equivalent units to the nearest whole number and round all other Intermediate calculations to 2 decimal places.)Explanation / Answer
Solution: The correct option is the 1st option i.e $ 54.72
Working Note:Statement of Equivalent Production
Particulars
Materials
Conversion
% units
% units
Opening WIP 1700 units
25% 425 units
35% 595 units
Units introduced
And completed 8100 units
100% 8100 units
100% 8100 units
Closing WIP 2500 units
65% 1625 units
50% 1250 units
Total Equivalent Units
10150 units1
9945 units
Total Cost
$ 179300
$ 368500
Cost per Equivalent Unit
$ 17.67
$ 37.05
Total Equivalent cost per unit= $ 17.67+$ 37.05= $ 54.72
Therefore cost of a completed unit transferred out of the department=$ 54.72
Particulars
Materials
Conversion
% units
% units
Opening WIP 1700 units
25% 425 units
35% 595 units
Units introduced
And completed 8100 units
100% 8100 units
100% 8100 units
Closing WIP 2500 units
65% 1625 units
50% 1250 units
Total Equivalent Units
10150 units1
9945 units
Total Cost
$ 179300
$ 368500
Cost per Equivalent Unit
$ 17.67
$ 37.05
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