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	40,000	40,000
Units, beginning work in process:
14 x 0%	-	-
14 x 50%	-	7,000
Units, ending work in process:
20,000 x 100%	20,000	-
20,000 x 25%	-	5,000
Equivalent units of output	60,000	52,000

Costs in beginning work in process were direct materials, $25,000; conversion costs, $80,000. Manufacturing costs incurred during April were direct materials, $180,000; conversion costs, $332,800.

Required: 1. Prepare a physical flow schedule for April. Dama Company Physical Flow Schedule Units to account for: Units, beginning work in process 25,000 X Units started 60,000 Total units to account for 85,000 X Units accounted for: Started and completed 40,000 Units, beginning work in process 25,000 X Units, ending work in process 20,000 Total units accounted for 85,000 X 2. Compute the cost per equivalent unit for April. If required, round your answer to the nearest cent. $ 9.4 per equivalent unit 3. Determine the cost of ending work in process and the cost of goods transferred out. Cost of ending work in 92,000 process Cost of goods transferred out $ 570,000 4. Prepare the journal entry that transfers the costs from Cutting to Sewing. Work in Process-Sewing 570,000 X Work in Process-Cutting 376,000 X