Beginning Inventory: units=3,000; material costs=$4,500; conversion costs=$4,800

Question

Beginning Inventory: units=3,000; material costs=$4,500; conversion costs=$4,800

Started During the
Current Period : units=20,000; material costs=$48,000; conversion costs=$72,100

Ending Inventory : units=2,500


All materials are added at the beginning of the production process. The beginning inventory was 30% complete as to conversion, while the ending inventory was 40% completed for conversion purposes.FIFO Aluminum uses FIFO system of product costing.

Calculate the cost of goods completed and transferred out and the dollar amount in End Work-In-Process.

Explanation / Answer

Equivalent units:
Material: 0+ 17500+2500 = 20000
Conversion: 2100 + 17500 + 1000 = 20600

Cost per equivalent unit:
Material: 48000/20000=2.40
Conversion: 72100/20600=3.50

Cost of goods transferred out
Beginning:
Prior period costs 9300
Conversion cost (3.50*2100) 7350
Started and completed:
Materials (17500*2.40) 42000
Conversion (17500*3.50) 61250
Total cost of goods transferred out: 119900

Cost of ending work in process
Materials: (2500*2.40) 6000
Conversion: (1000*3.50) 3500
Total cost of ending work in process: 9500

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