Equivalent Units and Product Cost ReportFIFO Method

In its first month's operations (January 2016), Allred Company's Department 1 incurred charges of $140,000 for direct materials (10,000 units), $95,000 for direct labor, and $87,000 for manufacturing overhead. At month-end, 8,800 units had been finished and transferred out. The remaining units were finished with respect to material but only 25% complete with respect to conversion costs.

Assuming Allred uses the FIFO method and that materials are added at the beginning of the process and conversion costs occur evenly, compute the following:

1. The equivalent units for material and conversion.

2. The cost per equivalent unit for material and conversion.

3. The total cost assigned to the units transferred out.

4. The total cost assigned to the ending inventory.

5. Prove that your solutions to requirements (c) and (d) sum to the total costs to be accounted for.

Product Cost Report
			Direct Materials		Conversion Costs
Beginning Inventory	Answer		Answer		Answer
Current	Answer		Answer		Answer
Total Costs to Account For	Answer		Answer		Answer
Total Equivalent Units			Answer		Answer
Average cost / Equivalent unit			Answer	b.	Answer	b.
Beginning inventory
Costs incurred in Month 0	Answer
Costs incurred in Month 1	Answer
Started and finished	Answer
Cost of Goods Manufactured	Answer	c.
Ending Inventory:
Direct Materials	Answer
Conversion costs	Answer
Cost of Ending Inventory	Answer	d.
Total Costs Allocated	Answer	e.

Equivalent Units and Product Cost Report-FIFO Method In its first month's operations (January 2016), Allred Company's Department 1 incurred charges of $140,000 for direct materials (10,000 units), ! Assuming Allred uses the FIFO method and that materials are added at the beginning of the process and conversion costs occur evenly, compu a. The equivalent units for material and conversion. b. The cost per equivalent unit for material and conversion. C. The total cost assigned to the units transferred out. d. The total cost assigned to the ending inventory. e. Prove that your solutions to requirements (C) and (d) sum to the total costs to be accounted for. Allred Company, Department 1 Equivalent Units Calculations, January 2016 Equivalent Units % in Direct % in January Materials January Conversion Costs 0 0 % Complete/Transferred Beginning inventory Started & completed Ending inventory Total 0% 100 % 100% 0 8,800 8,800 1,200 10,000 100% 0 8,800 1,200 10,000 25 % 300 a. 9,100 a. Product Cost Report Direct Conversion Materials Costs Beginning Inventory $ 0 $ 0 $ 0 Current 0 x 140,000 X X Total Costs to Account For $ 0 X $ OX $ 0 X + Total Equivalent Units OX OX Average cost / Equivalent unit $ 0x b. $ O x b. Beginning inventory Costs incurred in Month 0 $ 0 Costs incurred in Month 1 0 Started and finished OX Cost of Goods Manufactured $ 0 X c. Ending Inventory: Direct Materials $ 0 x Conversion costs 0 x Cost of Ending Inventory $ 0x d. Total Costs Allocated $ 0x e