A Corporation uses the FIFO method in its process costing system. Data concernin
ID: 2358938 • Letter: A
Question
A 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 the beginning work in process inventory 750
Materials costs $ 5,300
Conversion costs $ 7,300
Percent complete with respect to materials 80%
Percent complete with respect to conversion 70%
Units started into production during the month 9,300
Units transferred to the next dept during the month 8,500
Materials costs added during the month $242,300
Conversion costs added during the month $373,000
Ending work in process inventory:
Units in ending work in process inventory 1,550
Percent complete with respect to materials 60%
Percent complete with respect to conversion 30%
The cost of a completed unit transferred out of the department is closest to:
Explanation / Answer
Units % Costs Beginning 750 80% $ 5,300 Started 9,300 $ 242,300 To be accounted for 10,050 Completed 8,500 (20% x 750) 150 (8,500 - 750) 7,750 Ending 1,550 60% 930 10,050 8,830(Total equiv units) $242,300/8,830 27.44 Conversion Costs Units % Costs Beginning 750 70% $ 7,300 Started 9,300 $ 373,000 To be accounted for 10,050 Completed 8,500 (30% x 750) 225 (8,500 - 750) 7,750 Ending 1,550 30% 465 10,050 8,440 $373,000/8,440 44.19 Cost per unit = 27.44 + 44.19 =71.63
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