Tamar Co. manufactures a single product in one department. All direct materials

Question

Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 30,200 units of product to finished goods inventory. Its 4,600 units of beginning work in process consisted of $95,900 of direct materials and $861,508 of conversion costs. It has 3,200 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $642,240 of direct material costs and $2,971,412 of conversion costs were charged to production.

Beginning work in process consisted of 4,600 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion.

Of the 30,200 units completed, 4,600 were from beginning work in process. The remaining 25,600 were units started and completed during May.

Assume that Tamar uses the FIFO method to account for its process costing system.

Prepare the company’s process cost summary for May using the FIFO method. (Round "Cost per EUP" to 2 decimal places.)

Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 30,200 units of product to finished goods inventory. Its 4,600 units of beginning work in process consisted of $95,900 of direct materials and $861,508 of conversion costs. It has 3,200 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $642,240 of direct material costs and $2,971,412 of conversion costs were charged to production.

Explanation / Answer

Particulars Units Direct Material Conversion Cost Beginning Inventory 4600 Started 28800 28800 Units Accounted for 33400 Beginning WIP (100-100) (100- 40) 4600 0 2760 Completed & Transfer Out 25600 25600 25600 Endind WIP (100%, 80%) 3200 3200 2560 Units Accounted for 33400 28800 30920 Costs to be Accounted for Beginning Inventory 95900 861508 957408 Added 642240 2971412 3613652 Costs to be Accounted for 738140 3832920 4571060 Cost per Equivalent Unit Costs to be Accounted for 642240 2971412 Equivalent Units 28800 30920 Per Unit Cost 22.3 96.10 Costs to be Accounted for Completed & Transferred Out Beginning WIP 95900 861508 957408 Completed & Transferred Out (0+25600)*22.3; (2760+25600)*96.10 570880 2725396 3296276 Ending WIP (3200*22.3); (2560*96.10) 71360 246016 317376 4571060

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