Question

Use the following information for questions 21-24.

The Gomez company manufactures a standard recliner. During February, the firm's Assembly Department started production of 275 chairs. During the month, the firm completed 400 chairs, and transferred them to the Finishing Department. The firm ended the month with 100 chairs in ending inventory. There were 225 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Gomez. Beginning work in process was 60% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs.

Beginning inventory:
Direct materials	$18,000
Conversion costs	$8,100
Manufacturing costs added during the accounting period
Direct materials	$19,800
Conversion costs	$16,380

How many of the units that were started during February were completed during February?

What were the equivalent units for conversion costs during February?

What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of February?

What is the cost of the goods transferred out during February?

Answer 1

Particulars	Units	Amount	Particulars	Units	Amount
Opening inventory	225	18000	COGS	400	47232
opening WIP (8100*60%)		4860	closing stock	100	11808
Materials	275	19800
WIP		16380
	500	59040		500	59040
Cost per Unit		118.08
Started and completed in February (in units)			275 units
Equivalent units for conversion cost in February			3240 units (8100*40%)
Direct maerials cost assigned to Ending Inventory			3618	[11808-(16380*50%)]
cost of goods transferred in February			47232