Hsu Corporation uses the FIFO method in its process costing system. The following data concern the company's Grinding Department for the month of August.  Cost in beginning work-in-process inventory$1,090 Units started and completed this month 2,670  Materials ConversionCost per equivalent unit$17.80  $34.50 Equivalent units required to complete the unitsin beginning work-in-process inventory 180   160 Equivalent units in ending work-in-process inventory 120   99 Required:Determine the cost of units transferred out of the department and the cost of ending work-in-process inventory during August using the FIFO method.  

What will be an ideal response?


FIFO method:

  
Transferred to the next department:   
From the beginning work-in-process inventory:   
Cost in beginning work-in-process inventory$1,090 
Cost to complete these units:   
Materials, 180 EUs at $17.80 per EU 3,204 
Conversion, 160 EUs at $34.50 per EU 5,520 
Total cost from beginning inventory 9,814 
Units started and completed this month, 2,670 units at $52.30 per unit 139,641 
Total cost transferred to the next department$149,455 
Work-in-process, August 31:   
Materials, 120 EUs at $17.80 per EU$2,136 
Conversion, 99 EUs at $34.50 per EU 3,416 
Total work-in-process, August 31$5,552 

Business

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