FIFO Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process

Dama Company produces women's blouses and uses the FIFO method to account for its manufacturing costs. The product Dama makes passes through two processes: Cutting and Sewing. During April, Dama's controller prepared the following equivalent units schedule for the Cutting Department:

		Direct Materials				Conversion Costs
Units started and completed			45,000				45,000
Units, beginning work in process:
18,000 0%
18,000 50%							9,000
Units, ending work in process:
20,000 100%			20,000
20,000 25%							5,000
Equivalent units of output			65,000				59,000

Costs in beginning work in process were direct materials, $25,000; conversion costs, $70,000. Manufacturing costs incurred during April were direct materials, $260,000; conversion costs, $377,600.

Required:

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1. Prepare a physical flow schedule for April.

blank Dama Company Physical Flow Schedule

Units to account for:	blank
Started and completedUnits, beginning work in processUnits, ending work in processUnits, beginning work in process	Units, beginning work in process
Started and completedUnits, ending work in processUnits startedUnits started	Units started
Total units to account for	fill in the blank 37afe806ef84035_5
Units accounted for:	blank
Started and completedUnits startedStarted and completed	Started and completed
Units, beginning work in processUnits startedUnits, beginning work in process	Units, beginning work in process
Units, ending work in processUnits startedUnits, ending work in process	Units, ending work in process
Total units accounted for	fill in the blank 37afe806ef84035_12

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1. A physical flow schedule shows the units to account for and what happened to them.

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2. Compute the cost per equivalent unit for April. If required, round your answer to the nearest cent. $fill in the blank d241a3fd7ff9007_1 per equivalent unit

3. Determine the cost of ending work in process and the cost of goods transferred out.

Cost of ending work in process	$fill in the blank d241a3fd7ff9007_2
Cost of goods transferred out	$fill in the blank d241a3fd7ff9007_3

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2. The equivalent units schedule measures the output of the period. A fully completed unit is counted as a unit of output. Output for a unit in ending work in process is counted by its degree of completion.

3. Unit cost = Costs of the period Output of the period. The cost of goods (services) transferred out is the unit cost multiplied by the units completed. The cost of EWIP is the unit cost multiplied by the equivalent units found in EWIP.

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4. Prepare the journal entry that transfers the costs from Cutting to Sewing.

blank	CashFinished GoodsMaterialsOverheadWork in Process-CuttingWork in Process-SewingWork in Process-Sewing	Work in Process-Sewing
	CashFinished GoodsMaterialsOverheadWork in Process-CuttingWork in Process-SewingWork in Process-Cutting		Work in Process-Cutting