FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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QualCo manufactures a single product in two departments: Cutting and Assembly. Information for the Cutting department for May
follows.
Beginning work in process inventory
Units started and completed
Units completed and transferred out
Ending work in process inventory
Beginning work in process inventory
Direct materials
Conversion
Costs added this period
Direct materials
Conversion
Total costs to account for
Equivalent units of production (EUP)
Cost per equivalent unit of production
+ Equivalent units of production
Cost per equivalent unit of production
Cost assignment
Beginning work in process
To complete beginning work in process
Direct materials
Conversion
Started and completed
Direct materials
Conversion
Completed and transferred out
Ending work in process
Direct materials
Conversion
Total costs accounted for
Units
EUP
Units
37,500
150,000
187,500
51, 250
Required:
1-3. Using the FIFO method, assign May's costs to the units transferred out and assign costs to its ending work in process inventory.
(Round "Cost per EUP" to 2 decimal places.)
EUP
EUP
$74,250
28,500
505,035
398, 395
Direct
Materials
Percent
Complete
60%
60%
$ 102,750
903,430
$ 1,006,180
Conversion
Percent
Complete
40%
Direct Materials
% Added
Materials
Cost per EUP
Cost per EUP
Cost per EUP
20%
EUP
Total cost
Total cost
Total cost
Conversion
% Added
Conversion
EUP
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Transcribed Image Text:QualCo manufactures a single product in two departments: Cutting and Assembly. Information for the Cutting department for May follows. Beginning work in process inventory Units started and completed Units completed and transferred out Ending work in process inventory Beginning work in process inventory Direct materials Conversion Costs added this period Direct materials Conversion Total costs to account for Equivalent units of production (EUP) Cost per equivalent unit of production + Equivalent units of production Cost per equivalent unit of production Cost assignment Beginning work in process To complete beginning work in process Direct materials Conversion Started and completed Direct materials Conversion Completed and transferred out Ending work in process Direct materials Conversion Total costs accounted for Units EUP Units 37,500 150,000 187,500 51, 250 Required: 1-3. Using the FIFO method, assign May's costs to the units transferred out and assign costs to its ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.) EUP EUP $74,250 28,500 505,035 398, 395 Direct Materials Percent Complete 60% 60% $ 102,750 903,430 $ 1,006,180 Conversion Percent Complete 40% Direct Materials % Added Materials Cost per EUP Cost per EUP Cost per EUP 20% EUP Total cost Total cost Total cost Conversion % Added Conversion EUP
Expert Solution
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Notes

Under FIFO method, the cost added during the period is considered to calculate cost per equivalent unit. 

The equivalent unit is computed by multiplying the units produced with their level of completion.

For beginning work in process, the level of completion is the remaining level that was incomplete.

Example

for material, it is 100% - 60% = 40% 

For conversion, it is 100% - 40% = 60% 

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