Question

Kim Manufacturing uses a process cost system to manufacture Dust Density Sensors for the mining industry. The following information pertains to operations for the month of May Beginning work-in-process inventory, May1 16,000 units Started in production during May 100,000 Units Completed production during May 92,000 units Ending work-in-process inventory, May 31 24,000 units . The beginning inventory was 20% complete for materials and 60% complete for conversion costs. The ending inventory was 40% complete for materials and 90% complete for conversion costs. Costs pertaining to the month of May are as follows: Beginning inventory costs are materials, $20,280; direct labor, $20,320; and factory overhead, $15,240. Costs incurred during May are materials used, $467,680; direct labor, $182,800; and factory overhead, $389,200. Part 1)- Using the weighted-average method, the total cost of the units in the ending work-in-process inventory at May 31 is Part 2)-Using the FIFO method, the equivalent cost per unit of materials for May is Part 3)- Using the FIFO method, the total cost of units in the ending work-in-process inventory at May 31 is

Answer 1

Part - 1)

Weighted Average Method:		Materials		Conversion
Units of Beginning Inventory	16,000	20%	3,200	60%	9,600
Units completed in May	92,000	100%	92,000	100%	92,000
Equivalent units in Ending inventory	24,000	40%	9,600	90%	21,600
Total Equivalent Units			104,800		123,200
			Materials	Conversion
Beginning costs ($20,320 + $15,240)			$20,280		$35,560
Costs added during May: ($182,800 + $389,200)			$467,680		$572,000
Total costs accounted for (a)			$487,960		$607,560
Total Equivalent Units (b)			104,800		123,200
Cost per equivalent unit (a/b)			$4.66		$4.93
Cost of ending materials (9,600 * $4.66)	$44,736
Cost of ending conversion (21,600 * $4.93)	$106,488
Cost of Ending work in process inventory	$151,224

Therefore, cost of ending work-in process inventory under weighted-average method is $151,224.

Part 2)

FIFO:		Materials		Conversion
Units of Beginning Inventory	16,000	80%	12,800	40%	6,400
Units completed in May	92,000	100%	92,000	100%	92,000
Equivalent units in Ending inventory	24,000	40%	9,600	90%	21,600
Total Equivalent Units			114,400		120,000
			Materials	Conversion
Costs added during May: ($182,800 + $389,200) (a)			$467,680		$572,000
Total Equivalent Units (b)			114,400		120,000
Cost per equivalent unit (a/b)			$4.09		$4.77

Therefore, equivalent unit cost for materials under FIFO is $4.09.

Part 3)

Cost of ending materials (9,600 * $4.09)	$39,264
Cost of ending conversion (21,600 * $4.77)	$103,032
Cost of Ending work in process inventory	$142,296

Therefore, cost of ending work in process inventory under FIFO is $142,296.