Problem 8-63 (Algo) Solving for Unknowns: FIFO Method (LO 8-4, 5) For each of the following independent cases, use FIFO costing to determine the information requested. Required: a. In the beginning inventory, 4,600 units were 40 percent complete with respect to materials. During the period, 37,000 units were transferred out. Ending inventory consisted of 6,900 units that were 60 percent complete with respect to materials. How many units were started and completed during the period?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Problem 8-63 (Algo) Solving for Unknowns: FIFO Method (LO 8-4, 5)
For each of the following independent cases, use FIFO costing to determine the information requested.
Required:
a. In the beginning inventory, 4,600 units were 40 percent complete with respect to materials. During the period, 37,000 units were transferred out. Ending inventory consisted of 6,900 units that were 60 percent complete with respect to materials. How many units were started and completed during the period?
b. At the start of the period, 3,700 units were in the work-in-process inventory; 3,100 units were in the ending inventory. During the period, 9,600 units were transferred out to the next department. Materials and conversion costs are added evenly throughout the production process. FIFO costing is used. How many units were started during this period?
c. Beginning inventory amounted to 1,100 units. This period, 4,600 units were started and completed. At the end of the period, the 3,200 units in inventory were 40 percent complete. Using FIFO costing, the equivalent production for the period was 6,100 units. What was the percentage of completion of the beginning inventory?
d. The ending inventory included $81,900 for conversion costs. During the period, 41,300 equivalent units were required to complete the beginning inventory, and 62,000 units were started and completed. The ending inventory represented 9,000 equivalent units of work this period. FIFO costing is used. What were the total conversion costs incurred this period?
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