Direct materials are added at the end of the process. Conversion costs are added evenly during the process.

1.Calculate equivalent units of transferred-in costs, direct materials, and conversion costs.

2. Summarize the total costs to account for, and calculate the cost per equivalent unit for transferred-in costs, direct materials, and conversion costs.

3. Assign costs to units completed (and transferred out) and to units in ending work in process

Note - Use FIFO method. need to first calculate equivalant units of work done in the current period (for transferred-in costs, direct materials, and conversion costs) to complete beginining work in process, to start and complete new units, and to produce ending work in process.

FIFO method

	Physical units (tons)	Transferred-in costs	Direct Materials	Conversion costs
Work in process,beginning inventory (June 1)	60	$45,000	$0	24,000
Degree of completion, beginning work in process		100%	0%	50%
transferred in during June	100
Completed and transferred out during June	120
work in process, ending inventory (june 30)	40
degree of completion, ending work in process		100%	0%	75%
total costs added during june		$114,000	$27,000	$62,400