FIFO Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment

Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of

the Tulsa, Oklahoma, plant reported the following data:

a$.$ In Cutting, all direct materials are added at the beginning of the process.

b$.$ Beginning work in process consisted of $40,000$ units, $20$ percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials,

$$1,215,000$; direct labor, $$223,000$; and applied overhead, $$150,000.$

c$.$ Costs added to production during the month were direct materials, $$2,565,000$; direct labor, $$3,471,050.$ Overhead was assigned using the following information:

d$.$ At the end of the month, $121,000$ units were transferred out to Welding, leaving $14,000$ units in ending work in process, or $25$ percent complete.

Assume that the FIFO method is used.

Required:

Prepare a physical flow schedule.

Swasey Fabrication, Inc.

Physical Flow Schedule

Units to account for:

Units accounted for: Calculate equivalent units of production for direct materials and conversion costs.

Compute unit cost. Round unit costs & final answer to three decimal places.

$

$$ per unit

Calculate the cost of goods transferred to Welding at the end of the month. In your calculations, round unit costs to three decimal places. Round your final answer to

the nearest dollar.

Calculate the cost of ending inventory. In your calculations, round unit costs to three decimal places. Round your final answer to the nearest dollar.

$

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The equivalent units schedule measures the output of the period. A fully completed unit is counted as a unit of output. Output for a unit in ending work in process is

counted by its degree of completion.

Using FIFO, cost per equivalent unit is calculated using only current costs. Determine by dividing current costs for direct materials and conversion costs by the associated

equivalent units. Add all unit costs to get the total cost per equivalent unit.

The cost of goods $($services$)$ transferred out is the unit cost multiplied by the units completed. The cost of EWIP is the unit cost multiplied by the equivalent units found

in EWIP. The partially completed units and all their associated costs are transferred to the next process $($department$)$ by debiting the WIP account of the process

$($department$)$ receiving the unit and crediting the WIP account of the transferring process $($department$).$