Question

Titon Sports, which produces footballs, has two departments: cutting and stitching. Footballs that have undergone the cutting process are immediately transferred to the stitching department. Direct material is added at the end of the stitching process. Conversion costs are added evenly during stitching operations. When those operations are done, the footballs are immediately transferred to Finished Goods. The following is a summary of the March 2019 operations of the stitching department:

Physical Units Transferred-in Costs Direct Materials Conversion Costs

Beginning work in process 17,500 $ 45,360 $0 $17,660
Degree of Completion 100% 0% 60%
Transferred in during March 2019 56,000
Completed and transferred out during March 2019 52,000
Ending work in process 21,500
Degree of Completion 100% 0% 20%
Total costs added during March $154,560 $28,080 $89,310

Required:

a. Suppose Titon Sports uses the weighted average method. What are the equivalent units for direct material costs during March
b. Suppose Titon Sports uses the weighted average method. What is the conversion cost per equivalent unit during March?
c. Suppose Titon Sports uses the weighted average method. What is the total cost assigned to the units completed and transferred out during March?
d. Suppose Titon Sports uses the weighted average method. What is the amount of conversion cost assigned to the ending work in process?
e. Suppose Titon Sports uses the FIFO method. What are the equivalent units for transferred-in costs during March?
f. Suppose Titon Sports uses the FIFO method. What is the direct material cost per equivalent unit during March?
g. Suppose Titon Sports uses the FIFO method. What is the total cost assigned to the ending work in process?
h. Suppose Titon Sports uses the FIFO method. What is the amount of conversion cost assigned to the units completed and transferred out during March?

Answer 1

We find the equivalent units for both Weighted Average Method and FIFO separately for cost calculations . These are given along as required.

Step-by-step explanation:

Titon Sports

Equivalent Units

Weighted Average Method

Particulars Units % of Completion Equivalent Units

Materials --Conversion Materials --Conversion

Completed and

Transferred 52,000 100% 100% 52,000 52,000

Ending work

in process 21,500 0% 20% Zero 4300

Equivalent Units 52,000 56,300

Particulars Units % of Completion Equivalent Units

Transferred In Transferred In

Completed and

Transferred 52,000 100% 52,000

Ending work

in process 21,500 100% 21,500

Equivalent Units 73500

Particulars Transferred In Materials Conversion Total

Costs

Beginning WIP $ 45,360 $0 $17,660

Total costs added $154,560 $28,080 $89,310

Total Costs 199920 $28,080 106970 $334970

b. Conversion cost per equivalent unit during March

Total Conversion Costs/ Total Equivalent Units Conversion

= 106970/56,300 = $1.9 per Equivalent Unit

Materials cost per equivalent unit during March

Total Materials Costs/ Total Equivalent Units Materials

= 28080/52000 = $ 0.54 per Equivalent Unit

Transferred In cost per equivalent unit during March

Total Transferred In Costs / Total Transferred In Units

= 199920 / 73500 = 2.72

C. Cost Assigned To Transferred Out Goods $ 268,320

Materials = 52,000*0.54= $ 28080

Conversion = 52,000* 1.9= 98800

Transferred in Units = 2.72 * 52000= 141440

Cost Assigned To Ending Work In Process $66650

Conversion = 4300* 1.9= 8170

Transferred in Units = 2.72 * 21500= 58,480

C. Total Costs Assigned = Transferred Out + Ending = $334970

d. Conversion cost assigned to the ending work in process: $8170

Conversion = 4300* 1.9= 8170

We see the difference between the weighted average and FIFO method is that the FIFO method only accounts for the current period costs not the total the costs.Where as the weighted method includes all the costs from preceeding department and also current costs.

e.Titon Sports

Equivalent Units

FIFO Method

Particulars Units % of Completion Equivalent Units

Materials --Conversion Materials --Conversion

Completed and

Transferred 52,000 100% 100% 52,000 52,000

Ending work

in process 21,500 0% 20% Zero 4300

Less

Beg. WIP 17500 0% 60% Zero 10500

Equivalent Units 52,000 45,800

Particulars Units % of Completion Equivalent Units

Transferred In Transferred In

Completed and

Transferred 52,000 100% 52,000

Ending work

in process 21,500 100% 21,500

Less

Beg. WIP 17500 100% 17500

Equivalent Units 56000

f. Materials cost per equivalent unit during March (FIFO)

Total Materials Costs/ Total Equivalent Units Materials

= 28080/52000 = $ 0.54 per Equivalent Unit

g. Cost Assigned To WORK In Process (FIFO) $ 8385

Conversion cost per equivalent unit during March

Total Conversion Costs/ Total Equivalent Units Conversion

= 89310/ 45,800 = $1.95 per Equivalent Unit

Conversion = 4300* 1.95= $ 8385

h. Cost Assigned To Transferred Out Goods $ 273,000

Materials = 52,000*0.54= $ 28080

Conversion = 52,000* 1.95= 101,400

Transferred In cost per equivalent unit during March

Total Transferred In Costs / Total Transferred In Units

= 154560 / 56,000 = 2.76

Transferred in Units Costs = 2.76 * 52000= 143520