Equivalent Units and Product Cost ReportFIFO Method In its f

Equivalent Units and Product Cost Report—FIFO Method

In its first month of operations (May of 2016), Allred Company\'s Department 1 incurred charges of $90,000 for direct material (9,000 units), $45,700 for direct labor, and $23,900 for manufacturing overhead. At month-end, 8,500 units had been finished and transferred out. Those units remaining were finished with respect to material but only 40% finished with respect to conversion.

Assuming Allred uses the FIFO method and that materials are added at the beginning of the process and conversion costs are incurred evenly throughout the period, compute the following:

The equivalent units for materials and conversion costs.

The cost per equivalent unit for materials and conversion costs.

The total cost assigned to the units transferred out.

The total cost assigned to the ending inventory.

Prove that your solutions to requirements (c) and (d) sum to the total costs to be accounted for.

Equivalent Units and Product Cost Report-FIFO Method In its first month of operations (May of 2016), Allred Company\'s Department 1 incurred charges of $90,000 for direct material (9,000 units), $45,700 for direct labor, and $23,900 for manufacturing overhead. At month- end, 8,500 units had been finished and transferred out. Those units remaining were finished with respect to material but only 40% finished with respect to conversion Assuming Allred uses the FIFO method and that materials are added at the beginning of the process and conversion costs are incurred evenly throughout the period, compute the following: a. The equivalent units for materials and conversion costs. b. The cost per equivalent unit for materials and conversion costs C. The total cost assigned to the units transferred out. d. The total cost assigned to the ending inventory e. Prove that your solutions to requirements (c) and (d) sum to the total costs to be accounted for Allred Company, Department 1 Equivalent Units Calculations, May 2016 %in May Equivalent Units %in May Direct Materials Conversion Costs Complete/Transferred Beginning inventory Started & completed Ending inventory Total a. Product Cost Report Direct Materials Conversion Costs Beginning Inventory Current Total Costs to Account For Total Equivalent Units Average cost / Equivalent unit b. b. eginning inventory Costs incurred in Month 0 S Costs incurred in Month 1 Started and finished Cost of Goods Manufactured $ C. Ending Inventory Direct Materials Conversion cOSts Cost of Ending Inventory Total Costs Allocated Check

Solution

a) equivalent unit :

Production cost report :

68000

	Physical unit	%	equivalent unit of material	%	Equivalent unit of conversion
Unit completed and transferred out	8500	100%	8500	100%	8500
Ending work in process	500	100%	500	40%	200
Total			9000		8700