He5-B9q Company operates two departments, the handling department and the packaging department. During May, the handling department reported the following information: % complete % complete units DM conversion work in process, May 1 113,000 33% 48% units started during May 201,000 work in process, May 31 169,000 74% 28% The cost of beginning work in process and the costs added during May were as follows: DM Conversion work in process, May 1 $ 94,128 $ 59,904 costs added during May $418,986 $372,816 Calculate the total cost of the 113,000 units in beginning work in process using the FIFO process costing method.

Total cost of the 113,000 units in beginning work in process is $282,628.58.

Explanation:

Note: The data in the question are merged together. They are therefore sorted before answering question by presenting the complete question as follows:

He5-B9q Company operates two departments, the handling department and the packaging department. During May, the handling department reported the following information:

                                                                 % complete        % complete

                                                  units               DM              conversion

work in process, May 1          113,000             33%                    48%

units started during May       201,000

work in process, May 31        169,000            74%                     28%

The cost of beginning work in process and the costs added during May were as follows:

                                                  DM             Conversion

work in process, May 1           $94,128          $59,904

costs added during May      $418,986         $372,816

Calculate the total cost of the 113,000 units in beginning work in process using the FIFO process costing method.

Explanation of the answer is now provided as follows:

This total cost of the 113,000 units in beginning work in process using the FIFO process costing method calculated using the following 4 steps:

Step 1: Calculation of equivalent units

Particulars                                                      DM            Conversion    

To complete work in process, May 1:  

        113000*(1-33%)                                    75,710 

        113000*(1-48%)                                                             58,760

Units started and completed (w.1)             88,000             88,000

Work in process, May 31:  

        169000*74%                                      125,060 

        169000*28%                                                               47,320  

Equivalent units                                       288,770         194,080  

Step 2: Calculation of cost per equivalent units

Cost per Equivalent unit = Costs incurred during May / Equivalent units (1)

Using equation (1), we have:

DM Cost per Equivalent unit = $418,986 / 288,770 = $1.45

Conversion Cost per Equivalent unit = $288,770 / 194,080 = $1.92

Step 3: Calculation of Total Cost to complete work in process, May 1

Cost to complete work in process, May 1 = To complete work in process, May 1 * Cost per Equivalent unit (2)

Using equation (1), we have:

DM Cost to complete work in process, May 1 = 75,710.00 * $1.45 = $109,850.16

Conversion Cost to complete work in process, May 1 = 58,760 * $1.92 = $112,874.42

Total Cost to complete work in process, May 1 = DM Cost to complete work in process, May 1 + Conversion Cost to complete work in process, May 1 = $109,850.16 + $112,874.42 + $222,724.58

Step 4: Calculation of  Total cost of the  113,000 units in beginning work in process

Total cost of the  113,000 units in beginning work in process = Work in process, May 1 + Cost to complete work in process, May 1 =  $59,904 + $222,724.58 + $282,628.58

Workings:

w.1: Units started and completed = Units started during May - Work in process, May 1 = 201,000 - 113,000 = 88,000

answerup to (3) three years;