FIFO Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Pr
ID: 2339414 • Letter: F
Question
FIFO Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process Dama Company produces women's blouses and uses the FIFO method to account for its manufacturing costs. The product Dama makes passes through two processes: Cutting and Sewing. During April, Dama's controller prepared the following equivalent units schedule for the Cutting Department: Direct Materials Costs Units started and completed 40,000 40,000 Units, beginning work in process: 20,000 × 0% 20,000 50% 10,000 Units, ending work in process 20,000 100% 20,000 5,000 20,000 2596 Equivalent units of output Costs in beginning work in process were direct materials, $20,000; conversion costs, $80,000. Manufacturing costs incurred during April were direct materials, $240,000; conversion costs, $352,000. Required 1. Prepare a physical flow schedule for April. 60,000 S5,000 Dama Company cal Flow Schedule Units to account for Units, Units started Total units to account for work in process 20,000 60,000 0,000 Units accounted for: Started and completed Units, Units, work in 20,000 20,000 80,000 work in Total units accounted for 2. Compute the cost per equivalent unit for April. If required, round your answer to the nearest cent. per equivalent unit 3. Determine the cost of ending work in process and the cost of goods transferred out. Cost of ending work in process Cost of goods transferred out Feedback 4. Prepare the journal entry that transfers the costs from Cutting to Sewing Work in Process-SewingExplanation / Answer
2) Cost per equivalent unit of material = 240000/60000 = 4 per equivalent unit
Cost per equivalent unit of conversion = 352000/55000 = 6.4 per equivalent unit
Cost per equivalent unit = 10.40
3) Cost of ending work in process = (20000*4+5000*6.4) = $112000
Cost of goods transferred out = (40000*4+50000*6.4)+(20000+80000) = $580000
4) Journal entry :
Date account and explanation debit credit Work in process-Sewing 580000 Work in process-Cutting 580000Related Questions
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