Awesome Clothes has two departments. Other facts are as follows:

● In the first department, material is introduced at the beginning of the process.

● In the second department, material is introduced at the end of the process.

● Conversion costs are applied uniformly throughout both processes.

● As units are finished, they are transferred to finished goods.

● Additional data for August for the second department:

Assume the company uses FIFO process costing.

a. Determine the equivalent units for each product cost using FIFO.

b. Calculate the unit cost for each product cost using FIFO.

c. Allocate the total costs between the finished goods and goods still in work in process using FIFO.

Transcribed Image Text:

Beginning Inventory August Activity Ending Inventory Units 8,000 units (60% complete) Transferred in 36,000 units 4,000 units (40% complete) Product Cost Direct materials Conversion costs Transferred in Beginning Inventory Current Costs Added in August $72,000 $126,224 $180,000 $0 $24,192 $40,000