17-27(35–40 min.)Transferred-in costs, FIFO method.Refer to the information in Exercise 17-26. Suppose that Trendy uses the FIFO method instead ofthe weighted-average method in all of its departments. The only changes to Exercise 17-26 underthe FIFO method are that total transferred-in costs of beginning work in process on June 1 are$45,000 (instead of $60,000) and total transferred-in costs added during June are $114,000(instead of $117,000).Required:Do Exercise 17-26 using the FIFO method. Note that you first need to calculate equivalent unitsof work done in the current period (for transferred-in costs, direct materials, and conversioncosts) to complete beginning work in process, to start and complete new units, and to produceending work in process.
SOLUTION EXHIBIT 17-27ASummarize the Flow of Physical Units and Compute Output in Equivalent Units; FIFO Method of Process Costing, Finishing Department of Trendy Clothing for June 2014.(Step 1)(Step 2)