A manufacturer uses process costing. It has one direct material cost pool and one conversion cost pool. Information for the month is as follows:

Beginning of Month End of Month

Work in process: 21,000 units 12,000 units

Conversion (% of completion in WIP): 35% 90%

Costs of Materials in WIP: $ 81,000 ?

Costs of Conversion in WIP: $113,000 ?

During the month:

Units started during the month: 70,000 units

Costs incurred for Materials: $280,000

Costs incurred for Conversion: $270,000

Sales: $920,000

Admin expenses $200,000

Other Information:

85% of direct materials is added at the beginning of the process, and the remaining 15% of direct materials (for packaging) are added at 95% completion.

Two assumption to make things a bit easier:

• There were no raw material inventories at any point of the process.
• There was no beginning or ending finished good inventory.

Required:

Part A: Calculate the total value of ending Work in Process and calculate Cost of Goods Sold, assuming that inventory is based on FIFO.

Part B: Calculate the total value of ending Work in Process and calculate Cost of Goods Sold, assuming that inventory is based on Weighted Average.

Answer rating: 100% (QA)

FIFO METHOD step 1 determine physical unit to account for unit in beginning inventory 21000 completed unit transferred out 79000 unit started during t... View the full answer