Malfoy Industries who uses the FIFO method of process costin

Malfoy Industries, who uses the FIFO method of process costing, manufactures products in three sequential processes: Molding, Plating, and Finishing. In the Plating process, direct materials are added at the beginning of the process, while conversion costs are incurred evenly throughout the process. The normal spoilage rate in the Plating process is 1% of good units produced. Malfoy provided the following information about the Plating process in June:

Work-in-Process Inventory

Beginning

Ending

Units

700

900

Percent of Process Complete

30%

60%

Costs Incurred

Beginning

Work-in-Process

Current Period

Transferred-In Costs

$1,500.00

$9,400.00

Direct Materials Costs

$2,330.00

$17,800.00

Conversion Costs

$1,025.00

$12,156.00

Units

Started

Completed and

Transferred Out

Units

5,500

5,200

Find the following:

Cost per equivalent unit for transferred-in costs:

Dollars

2)

Cost per equivalent unit for direct materials:

Dollars

3)

Cost per equivalent unit for conversion costs:

Dollars

4)

The value of good units completed and transferred out:

Dollars

5)

The value of abnormal spoilage:

Dollars

6)

The value of ending work in process inventory:

Dollars

Work-in-Process Inventory	Beginning	Ending
Units	700	900
Percent of Process Complete	30%	60%
Costs Incurred	Beginning Work-in-Process	Current Period
Transferred-In Costs	$1,500.00	$9,400.00
Direct Materials Costs	$2,330.00	$17,800.00
Conversion Costs	$1,025.00	$12,156.00
Units	Started	Completed and Transferred Out
Units	5,500	5,200

Solution

Proess Costing Statement of Equialent Prodution Units ( Under FIFO Method) Particulars Input Units Particulars Output Units Equivalent Production % Equivalent units Opening WIP 700 From opening WIP 700 70% 490 Units introduced 5500 Fresh inputs 4500 100% 4500 Units completed and transferred to next process 5200 Normal loss (1% of 5200) 52 52                             -   Closing WIP 900 60% 540 Abnormal Loss (Bal. Fig.) 48 100% 48 6200 6200 Computation Cost per Equivalent Production Unit: Cost of opening WIP = 4855 Cost of the process for the period =    39356 Total Process Cost 44211 Cost Per Equivqlent Unit = Total Process Cost Input units - Normal loss units = 44211 (6200 - 52) = 7.191 per unit Statement of Evaluation Particulars Equivalent units Cost per units ($) Amount 1 Opening WIP completed during the period 490 7.191 3523.59 Add: cost of WIP @ the beginning                              -                                                          -   4855 Complete cost of 700 of opening WIP 8378.59 2 Completely processed Units 4500 7.191 32359.5 3 Abnormal Loss 48 7.191 345.168 4 Closing WIP 900 7.191 6471.9