Question

The Smelting Department of Polzin Company has the following production and cost data for September.

Production: Beginning work in process 2,100 units that are 100% complete as to materials and 20% complete as to conversion costs; units started and finished 8,900 units; and ending work in process 900 units that are 100% complete as to materials and 40% complete as to conversion costs.

Manufacturing costs: Work in process, September 1, $16,000; materials added $59,780; labor and overhead $140,032.

Polzin uses the FIFO method to compute equivalent units.

Determine the costs to be assigned to the units transferred out and in process. (Round unit costs to 2 decimal places, e.g. 2.25 and final answers to 0 decimal places, e.g. 1,225.)

Answer 1

Answer

• Requirement:
  Cost assigned to the units transferred out = $ 205,714

Cost Transferred out:	EUP	Cost per EUP	Total Cost
Cost of Beginning WIP			16,000.00
Cost to complete beginning WIP-
- Direct Materials	-	6.10	-
- Conversion	1,680.00	12.80	21,504.00
Total cost to complete beginning WIP			37,504.00
Cost of Units started & completed this period:	EUP	Cost per EUP	Total Cost
- Direct Materials	8,900.00	6.10	54,290.00
- Conversion	8,900.00	12.80	113,920.00
Total costs started & Completed this period			168,210.00
Total cost of work finished this period				205,714.00

--Cost of ending WIP inventory = $ 10,098

Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	900	$                              6.10	$            5,490.00
- Conversion	360	$                            12.80	$            4,608.00
Total cost of ending WIP				$               10,098.00

• Related workings

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	900	100.0%	900	40.0%	360
Units STARTED & COMPLETED	8,900	100%	8,900	100%	8,900
Units of beginning WIP	2,100	0.00%	-	80%	1,680
Equivalent Units of Production			9,800		10,940
COST per EUP			Material		Conversion
Cost incurred this period			$          59,780.00		$                  140,032.00
Total Costs		Costs	$          59,780.00	Costs	$                  140,032.00
Equivalent units of production		EUP	9,800	EUP	10,940
Cost per EUP			$             6.10000		$                        12.8000