Information for the Nichols Manufiacturing Company for the month of Manyis es Be
ID: 2544511 • Letter: I
Question
Information for the Nichols Manufiacturing Company for the month of Manyis es Beginning work in process: Cost of $5,010 Units, 800 Inventory at process, May 1 Direct materials, 100% complete Conversion costs, 70% complete Units started in May, 14,000 Ending work in process inventory: Units, 1,500 Diet materials, 100% complete Conversion costs, 30% complete Costs charged to Work in Process during May: Direct materials costs, $57,400 Direct labor costs, $20,049 Factory overhead costs, $30,073 Prepare a cost of production report for the month of May, using the FIFO method.Explanation / Answer
The first step is the preparation of quantity schedule.
Now, calculate the equivalent units:
Next, find cost per equivalent unit.
We need to find the cost of units transferred out. Since we are using FIFO method, we first include the entire beginning WIP in the cost of units transferred out and then include units started/added during the period.
Cost of units in ending work in process comes from units added during the period:
We can summarize the cost movement using the cost schedule given below:
As at 1st May 800 Started In 14,000 Units to be accounted for 14,800 Transferred out from units from 1st May 800 Units both started and completed during the current period 12,500 Units transferred out 13,300 As at 31 May 1,500 Units accounted for 14800