Jarvene Corporation uses the FIFO method in its process costing system. The foll
ID: 2336757 • Letter: J
Question
Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:
The cost of beginning inventory according to the company’s costing system was $11,040 of which $8,120 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $132,730. The costs per equivalent unit for the month were:
Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.
Materials Conversion Total
Total Cost of Units Transferred Out ________ ________ $135,160
Units in beginning inventory 400 Units started into production 3,000 Units in ending inventory 300 Units transferred to the next department 3,100Explanation / Answer
Materials Conversion costs Total Inventory in process, Beginning balance (1) 8120 2920 11040 To complete inventory in process, Beginning(2) 2032 4368 6400 Cost of completed beginning work in process (1+2) 10152 7288 17440 Started and completed during the month 68580 49140 117720 Total Cost of Units Transferred Out 78732 56428 135160 Calculations: To complete inventory in process, Beginning: Materials =400*(1-0.8)*25.4 Conversion costs =400*(1-0.4)*18.2 Started and completed during the month: Materials =(3100-400)*25.4 Conversion costs =(3100-400)*18.2
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