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Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:
Units in beginning inventory 400
Units started into production 3,000
Units in ending inventory 300
Units transferred to the next department 3,100
Materials Conversion
Percentage completion of beginning inventory 80 % 40 %
Percentage completion of ending inventory 70 % 60 %
The cost of beginning inventory according to the company’s costing system was $11,040 of which $8,120 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $132,730. The costs per equivalent unit for the month were:
Materials Conversion
Cost per equivalent unit $ 25.40 $ 18.20
1. Compute the total cost per equivalent unit for the month.
2. Compute the equivalent units of material and conversion in the ending inventory.
3. Compute the equivalent units of material and conversion that were required to complete the beginning inventory.
4. Compute the number of units started and completed during the month.
5. Compute the cost of ending work in process inventory for materials, conversion, and in total for the month.
6. Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.

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1. Total cost per equivalent unit $43.60

2. Equivalent unit in ending inventory  210; 180

3. Equivalent unit in beginning inventory 320; 160

4. Cost of unit started and completed 2,700

5. Cost of ending WIP $5,334 $3,276  

Total $8,612

6. Cost of the units transferred to the next department  $84,828  $54,972

Total $139,800

1. Computation  the total cost per equivalent unit for the month.

Total cost per equivalent unit =$ 25.40 +$ 18.20

Total cost per equivalent unit=$43.60

2. Computation for  the equivalent units of material and conversion in the ending inventory.

Material Conversion

Equivalent unit in ending inventory

300×70% = 210 300×60% = 180

3) Computation for  the equivalent units of material and conversion that were required to complete the beginning inventory.

Material Conversion

Equivalent unit in beginning inventory 400×80% =320 400×40% = 160

4) Computation for  the number of units started and completed during the month.

Cost of unit started and completed = 3,100-420

Cost of unit started and completed= 2,700

5. Computation for  the cost of ending work in process inventory for materials, conversion, and in total for the month.

Material Conversion

Cost of ending WIP

210×$25.40=5,334  180×18.20=3,276

Total =5,334+3,276

Total=$8,612

6. Computation the cost of the units transferred to the next department for materials, conversion, and in total for the month.

Material Conversion

Cost of ending WIP (3,020×$25.40+$8,120)  (2,860×$18.20+$2,920)

Cost of ending WIP $84,828  $54,972

Total=$84,828 +$54,972

Total=$139,800

(2700+320=3,020)

(2,700+160=2,860)

($11,040-$8,120=$2,920)

OR

Cost of units transferred out

Material Conversion

Cost of beginning work in progress 8,120+ 2,920

Total=11,040

Cost incurred on remaining work in progress =(320×$25.40) + (160×$18.20)

Total =8,128+2,912

Total =$11,040

Cost of unit started and completed during the month=(2,700×$25.40)   (2,700×$18.20)

Total=68,580+49,140

Total=117,720

Cost of the units transferred to the next department =$11,040+$11,040+117,720

Cost of the units transferred to the next department =$139,800

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