Question

Johnson Company adds materials, 50% at the start of the process and 50% at the end of the process in Department A. Conversion costs were 70% complete as to the 8,000 units in process on January 1 and 50% as to the 6,000 units in process on January 31. During the month of January, 12,000 units were transferred to Department B. An analysis of the costs relating to Work in Process is as follows:

Work in process, 1/1

                Materials, P12,000; Conversion costs, P25,000

Costs added during the month:

                Materials, P63,030; Conversion costs, P105,750

Using FIFO Method, the cost of the 12,000 units transferred to Department B is:

Answer 1

Answer------------$154,840

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed	% completed this period
	Material	Conversion	Material	Conversion
Beginning WIP	8,000	50%	70%	50%	30%
Units introduced	10,000
Total units to be accounted for	18,000
Completed and Transferred unit	12,000	0%	0%	100%	100%
Ending WIP	6,000	0%	0%	50%	50%

..

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material	Conversion
Units Transferred:	% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	8,000	50%	4,000	30%	2,400
From units started/Introduced	4,000	100%	4,000	100%	4,000
Total	12,000		8,000		6,400
	Total Units	Material	Conversion
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	6,000	50%	3,000	50%	3,000
Total EUP	18,000		11,000		9,400

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material	Conversion	TOTAL
Cost incurred in Current Period	$ 63,030	$ 105,750	$ 168,780
Total Equivalent Units	11,000	9,400
Cost per Equivalent Units	$ 5.73	$ 11.25	$ 16.98
Cost of Beginning WIP			$ 37,000
Total cost to be accounted for	$ 205,780

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred	12,000.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	4,000	$ 5.73	$ 22,920
	Conversion	2,400	$ 11.25	$ 27,000	$ 49,920
B	From units started & completed
	Material	4,000	$ 5.73	$ 22,920
	Conversion	4,000	$ 11.25	$ 45,000	$ 67,920
C=A+B	Total				$ 117,840
D	Cost of Beginning WIP		$ 37,000
E=C+D	Total Cost of Units transferred		$ 154,840