Question

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			27,000				27,000
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			33,000				35,500

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

Direct materials		$2.00
Conversion costs		6.00
Total		$8.00

The cost of beginning work in process was direct materials, $50,000; 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

Answer 1

1. Determine the cost of ending work in process.

Cost of ending work in process = (6000*2+4500*6) = 39000

Determine the cost of goods transferred out.
Cost of goods transferred out = (27000*2+31000*6+80000) = 320000

2. Prepare a physical flow schedule.

K-Briggs Company
Physical Flow Schedule
Units to account for:
Beginning work in process	10000
Unit started	33000
Total units to account for	43000
Units accounted for:
Units completed:
Beginning work in process	10000
Unit started and completed	27000
Ending work in process	6000
Total Units accounted for	43000