Question

Pix Company has the following production data for March: no beginning work in process, units started and completed 31,000, and ending work in process 4,100 units that are 100% complete for materials and 40% complete for conversion costs. Pix uses the FIFO method to compute equivalent units. If unit materials cost is $4 and unit conversion cost is $13. The total costs to be assigned are $564,720, prepare the cost section of the production cost report for Pix Company using the FIFO approach.

Answer 1

unit beggining WIP 0

Units started and completed 31,000

Ending inventory 4,100

Total physical units 35,100

Equivalent units (materials)

Units started and completed 31,000

WIP materials (4,100 x 100%) 4,100

Total units accounted for 35,100

Equivalent units (conversion)

Units started and completed 31,000

WIP materials (4,100 x 40%) 1,640

Total units accounted for 32.640‬

Cost Incurred during March:

35, 100 x 4 = 140,400

32,640 x 13 = 1,044,480

Total cost 1, 184,880

Cost assigned to units transferred out

31,000 x (4 + 13) = 527,000‬

Cost of WIP

4,100 x 4 = 16.400‬

1,640 x 13 = 21,320‬

Total 37,720‬

Step-by-step explanation:

We need to do the count of physical units

we need to calcualte the equivalent units:

transferred + ending x completion percentage

then the cost incurred

and allocate cost to finished goods and the ending WIP based on the equivalent units of materials and conversion