Question
D, Inc., uses three departments to produce a detergent. The Finishing Department is the third and last step before the product is transferred to storage.
D, Inc., uses three departments to produce a detergent. The Finishing Department is the third and last step before the product is transferred to storage. All materials needed to give the detergent its final composition are added at the beginning of the process in the Finishing Department. The company uses FIFO costing. The following data for the Finishing Department for October have been made available:
Production data:
In process, October 1 (labor and factory overhead, 75% complete) | 10,500 litres |
Units Started | 41,000 litres |
Finished and transferred to storage | 35,000 litres |
In process, October 31 (labor and factory overhead, 50% complete) | 16,500 litres |
Additional data:
Work-in-process inventory, October 1:
Cost breakdown | |
Cost from this department: | |
Materials | 25,000 |
Labor | 39,000 |
Factory overhead | 45,300 |
$109,300 | |
Cost added in this department:
Materials | $71,500 |
Labor | 136,000 |
Factory overhead | 131,000 |
Total costs | $338,500 |
Required:
Calculate the cost of the units transferred out to finished goods inventory and the value of the ending WIP under the FIFO method
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