Question

Yarmouth Company produces a liquid solvent in two departments: Mixing and Finishing. Accounting records at Yarmouth show the following information for Finishing operations for February (no new material is added in the Finishing Department).

WIP inventory—Finishing
Beginning inventory (30,000 units, 30% complete with respect to Finishing costs)
Transferred-in costs (from Mixing)	$	657,600
Finishing conversion costs		66,036
Current work (294,000 units started)
Mixing costs		5,174,400
Finishing costs		2,391,564

The ending inventory has 42,000 units, which are 60 percent complete with respect to Finishing Department costs and 100 percent complete for Mixing Department costs.

Required:

a. Complete the production cost report using the FIFO method. (Round "Cost per equivalent unit" to 2 decimal places.)

Answer 1

Answer

• Elements of Cost Report – FIFO Method

	Physical Units	Mixing Department	Finishing Department
Flow of Units:
Units to be accounted for:
Beginning WIP inventory	30,000
Units started this period	294,000
Total Units to account for	324,000
Units accounted for:
Completed & Transferred out
From Beginning WIP Inventory	30,000
Mixing Department		-
Finishing Department			21,000
Started & Completed currently	252,000	252,000	252,000
Units in Ending WIP Inventory	42,000
Mixing Department		42,000
Finishing Department			25,200
Total units accounted for	324,000	294,000	298,200

	TOTAL	Mixing Department	Finishing Department
Flow of Costs:
Cost of be accounted for:
Costs in beginning WIP Inventory	$                     723,636.00	$                 657,600.00	$          66,036.00
Current Period Costs	$                 7,565,964.00	$             5,174,400.00	$    2,391,564.00
Total Cost to be accounted for	$                 8,289,600.00	$             5,832,000.00	$    2,457,600.00
Cost per Equivalent units
Mixing Department		$                            17.60
Finishing Department			$                    8.02
Costs accounted for:
Costs assigned to units transferred out:
Costs from beginning WIP Inventory	$                     723,636.00	$                 657,600.00	$          66,036.00
Current Costs added to complete beginning WIP Inventory	$                     168,420.00
Mixing Department		$                                   -
Finishing Department			$       168,420.00
Current Costs of units started and completed:	$                 6,456,240.00
Mixing Department		$             4,435,200.00
Finishing Department			$    2,021,040.00
Total cost transferred out	$                 7,348,296.00	$             5,092,800.00	$    2,255,496.00
Cost of ending WIP Inventory	$                     941,304.00
Mixing Department		$                 739,200.00
Finishing Department			$      202,104.00
Total costs accounted for	$                 8,289,600.00	$             5,832,000.00	$    2,457,600.00