Mode Clothing, Inc., is a manufacturer of winter clothes. It has a knitting depa

Question

Mode Clothing, Inc., is a manufacturer of winter clothes. It has a knitting department and a finishing department. This exercise focuses on the finishing department. Direct materials are added at the end of the process. Conversion costs are added evenly during the process. Suppose that Mode uses the FIFO method. The fol lowing informaticn for June 2017 is available Ell (Click the icon to view the information.) Read the requirements Requirement 1. Calculate equivalent units of work done in the current period (for transferred-in costs, direct materials, and conversion costs) to complete beginning work in process, to start and complete new units, and to produce ending work in process. (Enter a "0" for any zero balances.) Equivalent Units Physical Units Transferred-In Direct Conversion (tons) Costs Materials Costs Work in process, beginning Transferred-in during current period To account for Completed and transferred out during current period: 105 160 From beginning work in process Started and completed Work in process, ending Accounted for Equivalent units of work done in current period

Explanation / Answer

Solution:

Finishing department Computation of Equivalent unit (FIFO) Particulars Physical units Transferred In Cost Material Conversion Units to be accounted for: Beginning WIP Inventory 105 Units Transferred In 160 Total unit to be accounted for 265 Units Accounted for: Units completed and transferred out From beginning inventory
Transferred In Cost - 0%
Material = 100%
Conversion - 40% 105 0 105 42 Started and completed currently 105 105 105 105 Units in ending WIP
Tranferred in Cost - 100%
Direct material - 0%
Conversion - 60% 55 55 0 33 Total units accounted for 265 160 210 180

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