Exercise 4A-1 (10 minutes)
FIFO Method
Material Conversio
s n
Equivalent units to complete beginning
work in process inventory:
Materials: 30,000 units × (100% − 65%).. 10,500
Conversion: 30,000 units × (100% −
30%)............................................. 21,000
Units started and completed during
October*......................................... 160,000 160,000
Equivalent units in ending work in process
inventory:
Materials: 15,000 units × 80% complete. .
..................................................... 12,000
Conversion: 15,000 units × 40%
complete....................................... 6,000
Equivalent units of production..................... 182,500 187,000
* 175,000 units started – 15,000 units in ending work in process
= 160,000 units started and completed
Exercise 4A-3 (15 minutes)
1. and 2.
Materia Conversi Total
ls on
Ending work in process inventory:
Equivalent units............................... 400 200
Cost per equivalent unit.................. $2.32 $0.75
Cost of ending work in process
inventory..................................... $928 $150 $1,078
Units transferred out:
Cost in beginning inventory............. $3,200 $650 $3,850
Cost to complete the units in beginning
inventory:
Equivalent units needed to
complete the beginning
inventory................................... 600 1,200
Cost per equivalent unit................ $2.32 $0.75
Cost to complete the units in
beginning inventory................... $1,392 $900 $2,292
Cost of units started and completed this
period:
Units started and completed this
period (26,000 units completed
and transferred to the next
department – 2,000 units in
beginning work in process
inventory).................................. 24,000 24,000
Cost per equivalent unit................ $2.32 $0.75
Cost of units started and $55,68 $73,68
completed this period................ 0 $18,000 0
Total cost of units transferred out. . . $79,82
2
Exercise 4A-5 (10 minutes)
Materia Conversi
ls on
Equivalent units needed to complete
beginning work in process inventory:
Materials: 500 units x (100% – 80%)........... 100
Conversion: 500 units x (100% – 40%)........ 300
Units started and completed during the
period (153,600 units started – 400 units 153,20
in ending inventory).................................... 0 153,200
Equivalent units in ending work in process
inventory:
Materials: 400 units x 75% complete.......... 300
Conversion: 400 units x 20% complete....... 80
Equivalent units of production......................... 153,60
0 153,580
Problem 4A-10 (45 minutes)
FIFO method
1 Equivalent units of production
.
Materia Conversi
ls on
Equivalent units needed to complete
beginning work in process inventory:
Materials: 10,000 units x (100% −
100%).................................................. 0
Conversion: 10,000 units x (100% −
30%).................................................... 7,000
Units started and completed during the
period (170,000 units started − 20,000 150,00
units in ending inventory)....................... 0 150,000
Equivalent units in ending work in
process inventory:
Materials: 20,000 units x 100%
complete............................................. 20,000
Conversion: 20,000 units x 40%
complete............................................. 8,000
Equivalent units of production.................... 170,00
0 165,000
2 Cost per equivalent unit
.
Material Conversi
s on
Cost added during the period (a)........ $139,40
0 $244,200
Equivalent units of production (b)...... 170,000 165,000
Cost per equivalent unit (a) ÷ (b)....... $0.82 $1.48
3. and 4. See the next page.
5 Cost Reconciliation
.
Costs to be accounted for:
Cost of beginning work in process inventory $ 13,40
($8,500 + $4,900)........................................ 0
Costs added to production during the period 383,60
($139,400 + $244,200)................................ 0
Total cost to be accounted for......................... $397,00
0
Costs accounted for as follows:
Cost of ending work in process inventory........ $ 28,24
0
Costs of units transferred out.......................... 368,76
0
Total cost accounted for.................................. $397,00
0
Problem 4A-10 (continued)
3. and 4.
Costs of Ending Work in Process Inventory and Units Transferred
Out
Materia Conversi Total
ls on
Ending work in process inventory:
Equivalent units.............................................................. 20,000 8,000
Cost per equivalent unit................................................. $0.82 $1.48
Cost of ending work in process inventory....................... $16,40 $28,24
0 $11,840 0
Units transferred out:
Cost in beginning work in process inventory.................. $13,40
$8,500 $4,900 0
Cost to complete the units in beginning work in process
inventory:
Equivalent units required to complete the beginning
inventory................................................................. 0 7,000
Cost per equivalent unit............................................. $0.82 $1.48
Cost to complete the units in beginning inventory..... $10,36
$0 $10,360 0
Cost of units started and completed this period:
Units started and completed this period..................... 150,00
0 150,000
Cost per equivalent unit............................................. $0.82 $1.48
Cost of units started and completed this period......... $123,0 $345,0
00 $222,000 00
Cost of units transferred out........................................... $368,7
60