1) ABC Company produces paddles. It has two departments that process all products. During July, the beginning work in process in the cutting department was half completed as to conversion, and complete as to direct materials. The beginning inventory included $40,000 for materials and $60,000 for conversion costs. Ending work-in-process inventory in the cutting department was 40% complete. Direct materials are added at the beginning of the process.

Beginning work in process in the finishing department was 80% complete as to conversion. Direct materials for finishing the units are added near the end of the process. Beginning inventories included $24,000 for transferred-in costs and $28,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows:

	Cutting	Finishing
Beginning work-in-process units	20,000	24,000
Units started this period	60,000
Units transferred this period	64,000	68,000
Ending work-in-process units		20,000
Material costs added	$48,000	$34,000
Conversion costs	28,000	68,500
Transferred-out cost	128,000

Required:

Prepare a production cost worksheet, using FIFO for the finishing department.

Answer: Production Cost Worksheet

Finishing Department

FIFO Method

Flow of production	Physical Units	Direct Materials	Conversion	Trans-In
Work in process, beginning
Started during period
To account for
Good units completed
Beginning work in process
Started and completed
Ending work in process
Accounted for

Costs	Totals	Direct Materials	Conversion	Trans-in
WIP, beginning
Costs added during period
Total costs to account for
Divided by equivalent units
Equivalent-unit costs

Assignment of costs
Work in process, beginning
Completion of beginning
Direct Materials
Conversion
Total Beginning Inventory
Started and Completed
Total costs transferred out
Work in process, ending
Transferred-in
Conversion
Costs accounted for