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 $45,00045,000$

Units, beginning work in process:

$16,000\backslash$times $0\%$

$16,000\backslash$times $50\%8,000$

Units, ending work in process:

$20,000\backslash$times $100\%20,000$

$20,000\backslash$times $25\%5,000$

Equivalent units of output $65,00058,000$

Costs in beginning work in process were direct materials, $$20,000$; conversion costs, $$80,000.$ Manufacturing costs incurred during April were direct materials, $$260,000$; conversion costs, $$371,200.$

Required:

Question Content Area

$1.$ Prepare a physical flow schedule for April.

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Dama Company

Physical Flow Schedule

Units to account for: blank

Units, beginning work in process

Units, beginning work in process

$0$

Units started

Units started

$45,000$

Total units to account for fill in the blank $3$c$9$f$55006$fc$8$f$9$f$\_5$

$45,000$

Units accounted for: blank

Started and completed

Started and completed

$45,000$

Units, beginning work in process

Units, beginning work in process

$8,000$

Units, ending work in process

Units, ending work in process

$20,000$

Total units accounted for fill in the blank $3$c$9$f$55006$fc$8$f$9$f$\_12$

$73,000$

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Feedback

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

Question Content Area

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

$fill in the blank d$09$a$010$a$4$f$81$f$8$b$\_1$

$13\mathrm{.}28$

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 d$09$a$010$a$4$f$81$f$8$b$\_2$

$148,973$

Cost of goods transferred out $fill in the blank d$09$a$010$a$4$f$81$f$8$b$\_3$

$597,742$

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Feedback

$2.$ 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.

Question Content Area

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

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Work in Process$-$Sewing

$597,742$

Work in Process$-$Cutting

$597,742$