Question

Mirada Company manufactures handheld calculators and has the following information available for the month of July: Work in process, July 1 (100% complete for materials, 25% for conversion) Direct materials Conversion cost 134,000 units $ 248,000 $ 402,000 Number of units started 228,000 units July costs Direct materials Conversion cost $ 434,000 $ 492,000 Work in process, July 31 (100% complete for materials, 10% for conversion) 152,000 units Required: Using the FIFO method of process costing, complete each of the following steps: 1. Reconcile the number of physical units worked on during the period. 2. Calculate the number of equivalent units. 3. Calculate cost per equivalent unit. 4. Reconcile the total cost of work in process.

Answer 1

Answers

• [1]

	Physical Units		Physical Units
Beginning Units	134,000	Units completed	210,000
Units started	228,000	Ending Units	152,000
Total Units	362,000	Total Units	362,000

• [2]

	Physical Units	Direct Material - Equivalent unit	Conversion - Equivalnet unit
Beginning Inventory	134,000	-	100,500
Started and completed	76,000	76,000	76,000
Ending Inventory	152,000	152,000	15,200
Total	228,000	228,000	191,700

• [3]

	Direct materials	Conversion
Cost per EU	$                  1.90351	$                               2.56651
	[($434000 / 228000)]	[($492000 / 191700)]

• [4]

	Prior Period	Direct materials	Conversion	Total Cost
Beginning Inventory	$650,000	$0	$257,934	$907,934
Started and completed	$0	$144,667	$195,055	$339,722
Ending Inventory	$0	$289,334	$39,011	$328,344
Total Cost accounted for	$650,000	$434,000	$492,000	$1,576,000