Crone Corporation uses the FIFO method in its process costing system. The following data concern the company's Assembly Department for the month of August. Cost in beginning work in process inventory$1,920Units started and completed this month 3,130 Materials ConversionCost per equivalent unit$9.50 $20.40Equivalent units required to complete the units inbeginning work in process inventory 360 140Equivalent units in ending work in process inventory 330 264 Required:Determine the cost of ending work in process inventory and the cost of units transferred out of the department during August using the FIFO method.
What will be an ideal response?
FIFO method:
| Ending work in process: | Materials | Conversion | Total | ||||
| Equivalent units of production (a) | 330 | 264 | |||||
| Cost per equivalent unit (b) | $ | 9.50 | $ | 20.40 | |||
| Cost of ending work in process inventory (a) × (b) | $ | 3,135 | $ | 5,386 | $ | 8,521 | |
| Units transferred out: | |||||||
| Cost in beginning work in process inventory | $ | 1,920 | |||||
| Cost to complete the units in beginning work in process inventory: | |||||||
| Equivalent units of production required to complete the units in beginning inventory (a) | 360 | 140 | |||||
| Cost per equivalent unit (b) | $ | 9.50 | $ | 20.40 | |||
| Cost to complete beginning inventory (a) × (b) | $ | 3,420 | $ | 2,035 | $ | 8,196 | |
| Cost of units started and completed this period: | |||||||
| Units started and completed this period (a) | 3,130 | 3,130 | |||||
| Cost per equivalent unit | $ | 9.50 | $ | 20.40 | |||
| Cost of units started and completed this period (a) × (b) | $ | 29,735 | $ | 63,852 | $ | 93,587 | |
| Total cost of units transferred out | $ | 101,783 | |||||
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