New Image Sports uses a process-costing system. For March, the company had the f
ID: 2465588 • Letter: N
Question
New Image Sports uses a process-costing system. For March, the company had the following activities:
Beginning work-in-process inventory (1/3 complete) 7,200 units
Units placed in production 28,800 units
Good units completed 21,600 units
Ending work-in-process inventory 12,000 units
Cost of beginning work in process $ 6,000
Direct material costs, current $21,600
Conversion costs, current $14,400
Direct materials are placed into production at the beginning of the process. All spoilage is normal and is detected at the end of the process. Ending WIP is 60% completed as to conversion.
Required:
Prepare a production cost worksheet using the FIFO method.
Explanation / Answer
Production cost worksheet using the FIFO method
Physical Units:
Units in Beginning work-in-process
7200
Units placed in production
28800
Total
36000
Units in Beginning work-in-process
7200
Units started and completed (21600-7200)
14400
Units in Ending work-in-process inventory
12000
Units spoilage (36000-21600-12000) =
2400
36000
Equivalent Units :
Direct Material
Conversion
Units in Beginning work-in-process
0
4800
(7200*2/3)
Units started and completed
14400
14400
Units in Ending work-in-process inventory
12000
7200
(12000*60%)
Equivalent Units
26400
26400
Cost Per Equivalent Unit:
Direct Material
Conversion
Total
Current Costs (A)
$ 21,600
$ 14,400
$ 36,000
Equivalent Units (B)
26400
26400
Cost Per Equivalent Unit = A/B =
$ 0.8182
$ 0.5455
$ 1.3636
Cost Allocation:
Direct Material
Conversion
Total
Beginning WIP:
Prior Period cost
6000
Current Costs
$ -
$ 2,618.18
$ 2,618.18
(4800*0.5455)
Total Costs for Beginning WIP
$ 8,618.18
Units started and completed
$ 11,781.82
$ 7,854.55
$ 19,636.36
(14400*0.8182)
(14400*0.5455)
Ending WIP
$ 9,818.18
$ 3,927.27
$ 13,745.45
(12000*0.8182)
(7200*0.5455)
Total Costs
$ 42,000.00
Production cost worksheet using the FIFO method
Physical Units:
Units in Beginning work-in-process
7200
Units placed in production
28800
Total
36000
Units in Beginning work-in-process
7200
Units started and completed (21600-7200)
14400
Units in Ending work-in-process inventory
12000
Units spoilage (36000-21600-12000) =
2400
36000
Equivalent Units :
Direct Material
Conversion
Units in Beginning work-in-process
0
4800
(7200*2/3)
Units started and completed
14400
14400
Units in Ending work-in-process inventory
12000
7200
(12000*60%)
Equivalent Units
26400
26400
Cost Per Equivalent Unit:
Direct Material
Conversion
Total
Current Costs (A)
$ 21,600
$ 14,400
$ 36,000
Equivalent Units (B)
26400
26400
Cost Per Equivalent Unit = A/B =
$ 0.8182
$ 0.5455
$ 1.3636
Cost Allocation:
Direct Material
Conversion
Total
Beginning WIP:
Prior Period cost
6000
Current Costs
$ -
$ 2,618.18
$ 2,618.18
(4800*0.5455)
Total Costs for Beginning WIP
$ 8,618.18
Units started and completed
$ 11,781.82
$ 7,854.55
$ 19,636.36
(14400*0.8182)
(14400*0.5455)
Ending WIP
$ 9,818.18
$ 3,927.27
$ 13,745.45
(12000*0.8182)
(7200*0.5455)
Total Costs
$ 42,000.00
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