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Problem 4A-74 Dana Inc. uses the FIFO method in its... Dana Inc. uses the FIFO method...

Problem 4A-74 Dana Inc. uses the FIFO method in its...

Dana Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company’s first processing department for a recent month.
  Work in process beginning:
  Units in process 300
  Percent complete with respect to materials 40 %
  Percent complete with respect to conversion 20 %
  Costs in the beginning inventory:
  Materials cost $500
  Conversion cost $2,090
  Units started into production during the month 10,000
  Units completed and transferred out 10,100
  Costs added to production during the month:
  Materials cost $15,624
  Conversion cost $253,500
  Work in process,ending:
  Units in process 200
  Percent complete with respect to materials 50 %
  Percent complete with respect to conversion 50 %


Required:
Using the FIFO method:


a.

Determine the equivalent units of production for materials and conversion costs.


Equivalent Units
of Production
  Materials       
  Conversion       


b.

Determine the cost per equivalent unit for materials and conversion costs. (Do not round intermediate calculations and final answers to 2 decimal places.)


Cost per
Equivalent Unit
  Materials $       
  Conversion $       


c.

Determine the cost of ending work in process inventory. (Do not round intermediate calculations. Omit the "$" sign in your response.)


  Cost of ending WIP $   


d.

Determine the cost of units transferred out of the department during the month. (Do not round intermediate calculations. Omit the "$" sign in your response.)


  Cost of units transferred out $   
Business   Accounting   
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Homework Answers

Answer #1

a) Determine the equivalent units of production for materials and conversion costs.

Physical unit % EUP-material % EUP-conversion
Beginning wip 300 60% 180 80% 240
Unit started and completed 9800 100% 9800 100% 9800
Ending wip 200 50% 100 500% 100
Total 10300 10080 10140

b) Determine the cost per equivalent unit for materials and conversion costs.

Material Conversion
Cost added during period 15624 253500
Equivalent unit 10080 10140
Cost per equivalent unit 1.55 25

c) Determine the cost of ending work in process inventory.

Cost of ending work in process = (100*1.55+100*25) = 2655

d) Determine the cost of units transferred out of the department during the month

Cost of units transferred out = (9980*1.55+10040*25)+2590 = 269059

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