FIFO Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment Swasey
ID: 2420517 • Letter: F
Question
FIFO Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment
Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of the Tulsa, Oklahoma, plant reported the following data:
In Cutting, all direct materials are added at the beginning of the process.
Beginning work in process consisted of 40,500 units, 20 percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $1,215,000; direct labor, $222,600; and applied overhead, $150,000.
Costs added to production during the month were direct materials, $2,565,000; direct labor, $3,471,150. Overhead was assigned using the following information:
At the end of the month, 121,500 units were transferred out to Welding, leaving 13,500 units in ending work in process, or 25 percent complete.
Assume that the FIFO method is used.
Required:
1. Prepare a physical flow schedule.
Swasey Fabrication, Inc.
Physical Flow Schedule
Units to account for:
Total units to account for
Units accounted for:
Total units accounted for
2. Calculate equivalent units of production for direct materials and conversion costs.
3. Compute unit cost. In your calculations, round unit costs to three decimal places. Round your final answer to the nearest cent.
$_______ per unit
4. Calculate the cost of goods transferred to Welding at the end of the month. In your calculations, round unit costs to three decimal places. Round your final answer to the nearest dollar.
$________
Calculate the cost of ending inventory. In your calculations, round unit costs to three decimal places. Round your final answer to the nearest cent.
$________
1. Prepare a physical flow schedule.
Swasey Fabrication, Inc.
Physical Flow Schedule
Units to account for:
Total units to account for
Units accounted for:
Total units accounted for
Explanation / Answer
1. Swasey Fabrication, Inc.
Physical Flow Schedule
Units, BWIP 40,500 * 20%
Units completed = 121,500
Units, EWIP: 13,500 * 25%
Units Started = 121,500 + 13,500 - 40,500 = 94,500
Units started and completed = 121,500 - 40,500 = 81,000
2.
Equivalent units schedule
3.
Unit direct material cost = (1,215,000 + 2,565,000) / 135,000 =$27.97 rounded to $28
Unit Conversion cost = (222,600 + 150,000 + 3,471,150 +2,400,000) / 124,875 = $50
Total unit cost = 28 + 50 = $78
4.
The cost of goods transferred to Welding
Units : 121,500
Cost per units : $78
Total cost : $9,477,000
5.
Cost of ending inventory
=(13500*28)+(3375*50) =$546,750
Units to account for: Units, BWIP 40500 Units Started 94500 Total units to account for 135,000 Units accounted for Units started and completed 81000 Units, BWIP 40,500 Units, EWIP 13,500 Total units accounted for 135,000Related Questions
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