FIFO Method

Process Costing

1) account for all units

2) calculate equivalent units

3) Sum up total costs

4) Compute unit costs

5) Allocation of costs to

FIFO method Process costing 1. Account for all units: 2. Calculate equivalent units: Units Mat. C.C. Beg. Inv Added Total 3,000 30,000 33,000 Beg. Inv. St & compl trans. Out End. Inv. Total 28,000 28,000 2,000 30,000 2,400 28,000 30,400 1,200 31,600 Trans. Out End. Inv. Total 31,000 2,000 33,000 3. Sum up total costs: Beg. Inv. $ 19,000 50,000/ 60,000 40,000/ 4. Compute unit costs: 30,000 = 31,600 = 1.666667 3.164557 Total 169,000 5. Allocation of costs to: Beg. Inv. 19,000.00 D.M C.C. 7,594.94 26,594.94 Sta. & comp D.M C.C. Costs transferred out 46,666.67 88,607.59 135,274.26 $161,869.20 End. Inv. D.M C.C. Cost of ending Inventory Total cost 3,333.33 3,797.47 7,130.80 $ 169,000.00 FIFO method Process costing 1. Account for all units: 2. Calculate equivalent units: Units Mat. C.C. Beg. Inv Added Total 3,000 30,000 33,000 Beg. Inv. St & compl trans. Out End. Inv. Total 28,000 28,000 2,000 30,000 2,400 28,000 30,400 1,200 31,600 Trans. Out End. Inv. Total 31,000 2,000 33,000 3. Sum up total costs: Beg. Inv. $ 19,000 50,000/ 60,000 40,000/ 4. Compute unit costs: 30,000 = 31,600 = 1.666667 3.164557 Total 169,000 5. Allocation of costs to: Beg. Inv. 19,000.00 D.M C.C. 7,594.94 26,594.94 Sta. & comp D.M C.C. Costs transferred out 46,666.67 88,607.59 135,274.26 $161,869.20 End. Inv. D.M C.C. Cost of ending Inventory Total cost 3,333.33 3,797.47 7,130.80 $ 169,000.00