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 | |
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