Question

1. FIFO Method, Valuation of Goods Transferred Out and Ending Work in Process

   K-Briggs Company uses the FIFO method to account for the costs of production. For Crushing, the first processing department, the following equivalent units schedule has been prepared:

   		Direct Materials				Conversion Costs
   Units started and completed			28,000				28,000
   Units, beginning work in process:
   10,000 × 0%			—				—
   10,000 × 40%			—				4,000
   Units, ending work in process:
   6,000 × 100%			6,000				—
   6,000 × 75%			—				4,500
   Equivalent units of output			34,000				36,500

   The cost per equivalent unit for the period was as follows:

   Direct materials		$2.00
   Conversion costs		7.00
   Total		$9.00

   The cost of beginning work in process was direct materials, $40,000; conversion costs, $30,000.

   Required:

   1. Determine the cost of ending work in process.
   $

   Determine the cost of goods transferred out.
   $

   2. Prepare a physical flow schedule.

   K-Briggs Company
   Physical Flow Schedule
   Units to account for:
   Total units to account for
   Units accounted for:
   Units completed:
   Total units accounted for

   Feedback

   A physical flow schedule shows the units to account for and what happened to them.

Answer 1

Answer -

1. Determine the cost of ending work in process.

Cost of ending work in process = (6000*2+4500*7) = 43,500

Determine the cost of goods transferred out.
Cost of goods transferred out = (28000*9+4000*7+70000) = 350000

2. Prepare a physical flow schedule.

K-Briggs Company
Physical Flow Schedule
Units to account for:
Beginning work in process	10000
Unit started	34000
Total units to account for	44000
Units accounted for:
Units completed:
Beginning work in process	10000
Unit started and completed	28000
Ending work in process	6000
Total Units accounted for	44000

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