Chapter $7$ Homework

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Long Island Rum accounts for production costs using the first in$,$ first out $($FIFO$)$ method of process costing. Direct materials are all added at the beginning of production and conversion costs are incurred uniformly during production.

In August, Long Island Rum had $8,500$ units in beginning work$-$in$-$process that were $30$ percent complete with respect to conversion

$20$

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costs. The company began production on another $13,500$ units in August and had $4,000$ units in ending work$-$in$-$process that were $75$ percent complete with respect to conversion costs.

Long Island Rum incurred $\backslash (\backslash$$ $160,000\backslash )$ of direct materials costs and $\backslash (\backslash$$ $30,000\backslash )$ of conversion costs in July for August's beginning work$-$inprocess units. Long Island Rum incurred an additional $\backslash$$$250,000$ in direct materials costs and $\backslash$$$180,000$ in conversion costs in August.

Required:

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|\}$

$\backslash$hline Question & $\backslash$multicolumn$\{3\}\{|$c$|\}\{$Answer$\}\backslash \backslash$

$\backslash$hline a$.$ What are the equivalent units of production for direct materials in August? & & $14,700$ & units $\backslash \backslash$

$\backslash$hline b$.$ What is the total per$-$unit production cost for a unit started and completed in August? Note: Do not round intermediate calculations. Round your final answer to $2$ decimals. & & & $\backslash \backslash$

$\backslash$hline c$1.$ What are the total costs transferred out of production? Note: Do not round your intermediate calculations. Round your final answer to $2$ decimals. & & & $\backslash \backslash$

$\backslash$hline c$2.$ What is the total cost of ending work$-$in$-$process inventory? Note: Do not round your intermediate calculations. Round your final answer to $2$ decimals. & $\backslash$$ & $\backslash (121,120\mathrm{.}00\backslash )$ & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$