Question

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day: $ 985 572 Beginning WIP inventory Direct materials Conversion costs Current period costs Direct materials Conversion costs 27,275 18,722 Quantity information is obtained from the manufacturing records and includes the following: Beginning inventory Current period units started Ending inventory 850 units (70% complete as to materials, 60% complete as to conversion) 6,000 units 1,600 units (50% complete as to materials, 20% complete as to conversion)

Answer 1

Compute equivalent units of production under FIFO METHOD

PARTICULAR	MATERIAL	CONVERSION
UNITS COMPLETED AND TRANSFERRED TO NEXT DEPARTMENT(note below) 5250 unit's
beginning inventory. 850 units	(850×30%) 255	(850×40%) 340
Units started during the month (4400units)	(4400×100%) 4400	(4400×100%) 4400
Ending inventory	(1600×50%) 800	(1600×20%) 320
Total equivalent units of production	5455	5060

Note: units transferred to next department = beginning inventory + units started during the month - ending inventory

= 850+6000 - 1600 = 5250 units

calculate cost per Equivalent unit

Particular	material	conversion
Cost added during the month	$27275	$18722
Equivalent units	5455	5060
Cost per Equivalent unit	$5	$3.7

Cost of goods transferred

Particular	amount
Beginning inventory cost ($985 +$572)	$1557
Units completed and transferred out
Beginning balance (255×$5)+(340×$3.7)	$2533
Cost during the period (4400×($5+$3.7)	$38280
Total	$42370

Cost of ending inventory

Particular	amount
Ending inventory (800×$5)+(320×$3.7)	$5184

ALL THE BEST

PLEASE DO SUPPORT US

ANY DOUBT PLEASE COMMENT BELOW

THANK YOU