Question

Pix Company has the following production data for March: no beginning work in process, units started and completed 25,500, and ending work in process 4,400 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 $5 and unit conversion cost is $12, determine the costs to be assigned to the units transferred out and the units in ending work in process. The total costs to be assigned are $476,620.

Answer 1

Ending Work In Process Cost = $43,120

Units Transferred out Cost = $433,500

Step-by-step explanation:

Step 1 : Equivalent units calculation

Materials

Ending Work in Process = 4,400 x 100% = 4,400 units

Conversion

Ending Work in Process = 4,400 x 40% = 1,760 units

Step 2 : Total Costs assigned to Ending Work In Process

Ending Work In Process Cost = Materials + Conversion Costs

= 4,400 x $5 + 1,760 x $12

= $43,120

Step 3 : Total Cost of Units Transferred out

Units Transferred out = Total Unit Cost x Units transferred

= $17.00 x 25,500

= $433,500