Cornerstone Exercise 6.8 (Algorithmic)
Cost Information and FIFO
Gunnison Company had the following equivalent units schedule and cost information for its Sewing Department for the month of December:
| Direct Materials |
|
Conversion Costs |
| Units started and completed |
42,000 |
42,000 |
| Add: Units in beginning work in process × |
|
|
| Percentage complete: |
|
|
| 4,000 × 0% direct materials |
- |
|
| 4,000 × 50% conversion Costs |
|
2,000 |
| Add: Units in ending work in process × |
|
|
| Percentage complete: |
|
|
| 10,000 × 100% direct materials |
10,000 |
- |
| 10,000 × 35% conversion Costs |
- |
3,500 |
| Equivalent units of output |
52,000 |
47,500 |
| Costs: |
|
|
| Work in process, December 1: |
|
|
| Direct Material |
|
$52,000 |
| Conversion Costs |
|
8,000 |
| Total Work in process |
|
$60,000 |
| Current costs: |
|
|
| Direct Material |
|
$728,000 |
| Conversion Costs |
|
142,500 |
| Total current costs |
|
$870,500 |
Required:
1. Calculate the unit cost for December, using the FIFO method. mce_markernbsp;per equivalent unit
2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.
Cost of goods transferred out
Cost of EWIP
BWIP
Current (December)
Total
3. What if you were asked for the unit cost from the month of November? Calculate November's unit cost.