Fifo fifo method equivalent units materials to

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Unformatted text preview: (100% - 40%) 180 Conversion: 300 units × (100% - 20%) Units started and completed during June Conversion 240 5,100 5,100 Ending Work in Process Materials: 900 units × 60% complete Conversion: 900 units × 30% complete Equivalent units of production Wang 2013 540 270 5,820 5,610 43 Example: Weighted Average vs. FIFO • FIFO Method – Summary of total costs: Total Cost Cost to be accounted for: W ork in process, June 1 Cost added in June Total cost Equivalent units Wang 2013 Materials Conversion $ 10,039 199,751 $ 118,621 $ 81,130 $ 209,790 $ 118,621 $ 81,130 5,820 5,610 44 Example: Weighted Average vs. FIFO • FIFO Method – Cost per equivalent unit: Total Cost Cost added in June Equivalent units Cost per equivalent unit $118,621 ÷ 5,820 Conversion $ 118,621 5,820 $ $ 20.3816 $ 199,751 Materials $ 14.4617 81,130 5,610 $81,130 ÷ 5,610 Total cost per equivalent unit = $20.3816 + $14.4617 = $34.8433 45 Wang 2013 Example: Weighted Average vs. FIFO • FIFO Method – Cost Reconciliation: Assembly Department Cost of Ending WIP Inventory Materials Conversion Ending WIP inventory: Equivalent units Cost per equivalent unit Cost of Ending WIP inventory 540 $ 20.3816 $ 11,006 540 × $20.3816 Wang 2013 270 $ 14.4617 $ 3,905 Total $ 14,911 270 × 14.4617 46 Example: Weighted Average vs. FIFO • FIFO Method – Cost Reconciliation: Assembly Department Cost of Units Transferred Out in June Materials Conversion Cost of Units Transferred Out: Cost in beginning WIP inventory $ $ Cost to complete beginning WIP Equivalent units to complete 180 240 Cost per equivalent unit $ 20.3816 $ 14.4617 Cost to complete beginning WIP $ 3,668 $ 3,471 Cost of units started and completed: Units started and completed 5,100 5,100 Cost per equivalent unit $ 20.3816 $ 14.4617 Cost of units started and completed $ 103,946 $ 73,755 Cost of Units Transferred Out Wang 2013 Total $ 10,039 7,139 177,701 $ 194,879 47 Example: Weighted Average vs. FIFO • FIFO Method – Cost Reconciliation: Assembly Department Cost Reconciliation for June Costs to be accounted for: Cos...
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