Question

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting...

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day:

Beginning WIP inventory
Direct materials $ 962
Conversion costs 497
Current period costs
Direct materials 19,320
Conversion costs 14,994

Quantity information is obtained from the manufacturing records and includes the following:

Beginning inventory 600 units

(70% complete as to materials,

55% complete as to conversion)

Current period units started 5,500 units
Ending inventory 1,700 units

(50% complete as to materials,

20% complete as to conversion)

Required: FIFO Method

(1) Compute the equivalent units for the materials and conversion cost calculations.

Equivalent units for materials ----------------
Equivalent units for conversion costs -----------------

(2) Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method. (Round your answers to 2 decimal places.)

Cost Per Equivalent Unit
Direct materials ---------------
Conversion costs ----------------

*ANSWER needs to be filled in the space that is marked "-------------"

Homework Answers

Answer #1

1) compute equivalent units (under FIFO METHOD)

Particular material conversion
Unit's started and completed (note below) 4400units
Beginning inventory

(600×30%)

180

(600×45%)

270

Unit's introduced in the Period

(3800×100%)

3800

(3800×100%)

3800

Ending inventory

(1700×50)

850

(1700×20%)

340

Total equivalent units 4830 4410

​​​​​​ Unit's started and completed =beginning balance+unit during the month - ending inventory

= 600units +5500units - 1700units

= 4400 units

2) compute cost per Equivalent units under fifo method

Particular material conversion
(a)Cost incurred during the month $19320 $14994
(b)Tota equivalent units 4830 4410
cost per Equivalent unit (a/b) $4 $3.4

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