During April, the first production department of a process manufacturing system completed its work on 300,000 units of a product and transferred them to the next department. Of these transferred units, 60,000 were in process in the production department at the beginning of April, and 240,000 were started and completed in April. April's beginning inventory units were 60% complete with respect to materials and 40% complete with respect to conversion. At the end of April, 82,000 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to conversion. The production department had $850,368 of direct materials and $649,296 of conversion costs charged to it during April. Also, its beginning inventory of $167,066 consists of $118,472 of direct materials cost and $48,594 of conversion costs. Using the FIFO method, prepare the direct materials cost and the conversion cost per equivalent unit and assign April's costs to the department’s output. (Round "Cost per EUP" to 2 decimal places.)

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

                Equivalent Units of Production-FIFO Method

Particular  unitsMaterial (%)Conversion (%)Material EUPConversion EUP

Completed periods of beginning units60,0000.400.6024,00036,000

Started and completed units 240,000100100240,000240,000

Ending work in process units82,0000.800.3065,60024,600

Equivalent units of production382,000  329,600300,600

Particular               Material cost             Conversion cost  

Total cost incurred$850,368             $649,296

Equivalent units of production329,600           300,600

Cost per unit of production  $2.58               $2.16

         ($850,368 ÷ 329,600)   ($649,296 ÷ 300,600)

                                  Total Costs for Accounts

Particular  Amount ($)

Beginning period-conversion cost48,594

Beginning period-Direct material cost118,472

Current period-conversion cost649,296

Current period-Direct material cost850,368

Total costs for accounts1,666,730

Assignment and Reconciliation Cost

Particular  Per EUP cost ($)×  Equivalent unit of productionTotal cost ($)Total amount ($)

Opening Inventory      167,066

To complete conversion2.16  ×36,00077,760  

To complete materials2.58×24,00061,920  

Complete units total cost    +139,680

Total cost of 60,000 unit in opening inventory  306,746

Direct material cost2.58×240,000619,200  

Conversion cost2.16  ×240,000518,400  

Started and completed 240,000 units total cost  +1,137,600

Transferred out Total cost of 300,000 units    1,444,346

Direct material cost2.58×  65,600169,248  

Conversion cost2.16   ×24,60053,136  

In closing inventory Total cost of 82,000 units  +222,384

Total assigned cost    16,66,730