Jarvene Corporation uses the FIFO method in its process costing system. The foll
ID: 2539826 • Letter: J
Question
Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:
The cost of beginning inventory according to the company’s costing system was $7,833 of which $4,865 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $177,160. The costs per equivalent unit for the month were:
Required:
1. Compute the total cost per equivalent unit for the month.
2. Compute the equivalent units of material and conversion in the ending inventory.
3. Compute the equivalent units of material and conversion that were required to complete the beginning inventory.
4. Compute the number of units started and completed during the month.
5. Compute the cost of ending work in process inventory for materials, conversion, and in total for the month.
6. Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.
4,5,6 are willing to fixed, thx
Units in beginning inventory 390 Units started into production 4,290 Units in ending inventory 340 Units transferred to the next department 4,340Explanation / Answer
Solution 1:
Total cost per equivalent unit = Material cost per equivalent unit + conversion cost per equivalent unit
= $18 + $23 = $41
Solution 2, 3 & 4:
From above table:
2. Equivalent unit of materia and conversion in ending inventory:
Material = 238 units
Conversion = 102 units
3. Equivalent units of material and conversion that were required to complete the beginning inventory:
Material = 78 units
Conversion = 312 units
4. Number of units started and completed during the month = 3950 units
Solution 5 and 6:
Current cost of material = Equivalent units * equivalent cost per unit = 4266*18 = $76,788
Current cost of conversion = 4364 *23 = $100,372
From above table:
5. Cost of ending WIP:
Material = $4,284
Conversion = $2,346
Total = $6,630
6. Cost of the units transferred to the next department for materials, conversion, and in total for the month:
Material = $77,369
Conversion = $100,994
Total = $178,363
Jarvene Corporation Process Department Computation of Equivalent unit (FIFO) Particulars Physical units Material Conversion Units to be accounted for: Beginning WIP Inventory 390 Units started this period 4290 Total unit to be accounted for 4680 Units Accounted for: Units completed and transferred out From beginning inventoryMaterial - 20%
Conversion - 80% 390 78 312 Started and completed currently 3950 3950 3950 Units in ending WIP
Material - 70%
Conversion - 30% 340 238 102 Total units accounted for 4680 4266 4364
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