FIFO Method, Unit Cost, Valuation of Goods Transferred Out andEnding Work in Process
Dama Company produces women's blouses and uses the FIFO methodto account for its manufacturing costs. The product Dama makespasses through two processes: Cutting and Sewing. During April,Dama's controller prepared the following equivalent units schedulefor the Cutting Department:
| | DirectMaterials | | Conversion Costs |
| Units started and completed | | | 40,000 | | | | 40,000 | |
| Units, beginning work in process: | | | | | | | | |
| 12,000 × 0% | | | — | | | | — | |
| 12,000 × 50% | | | — | | | | 6,000 | |
| Units, ending work in process: | | | | | | | | |
| 20,000 × 100% | | | 20,000 | | | | — | |
| 20,000 × 25% | | | — | | | | 5,000 | |
| Equivalent units of output | | | 60,000 | | | | 51,000 | |
Costs in beginning work in process were direct materials,$25,000; conversion costs, $70,000. Manufacturing costs incurredduring April were direct materials, $180,000; conversion costs,$326,400.
Required:
1. Prepare a physical flow schedule forApril.
|
| Dama Company |
| Physical Flow Schedule |
| Units to account for: | |
| Units, beginning work in process | |
| Units started | |
| Total units to account for | |
| Units accounted for: | |
| Started and completed | |
| Units, beginning work in process | |
| Units, ending work in process | |
| Total units accounted for | |
2. Compute the cost per equivalent unit forApril. If required, round your answer to the nearest cent.
$ per equivalent unit
3. Determine the cost of ending work in processand the cost of goods transferred out.
| Cost of ending work in process | $ |
| Cost of goods transferred out | $ |
4. Prepare the journal entry that transfers thecosts from Cutting to Sewing.
| Work in Process-Sewing | | |
| Work in Process-Cutting | | |
