Question:
FIFO METHOD, VALUATION OF GOODS TRANSFERRED OUT AND ENDING WORK IN PROCESS Alden Company uses the FIFO method to account for the costs of production. For crushing, the first processing department, the following equivalent units schedule has been prepared:
|
|
Direct
|
Conversion
|
|
|
Materials
|
Costs
|
|
Units started and completed
|
22,000
|
22,000
|
|
Units, beginning work in process:
|
|
|
|
10,000 * 0%
|
-
|
-
|
|
10,000 * 40%
|
-
|
4,000
|
|
Units, ending work in process:
|
|
|
|
6,000 * 100%
|
6,000
|
-
|
|
6,000 * 75%
|
-
|
4,500
|
|
Equivalent units of output
|
28,000
|
30,500
|
The cost per equivalent unit for the period was as follows:
|
Direct materials
|
$3.00
|
|
Conversion costs
|
5.00
|
|
Total
|
$8.00
|
The cost of beginning work in process was direct materials, $30,000; conversion costs, $25,000.
Required:
1. Determine the cost of ending work in process and the cost of goods transferred out.
2. Prepare a physical flow schedule.