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Apply the Concepts: FIFO and Weighted Average Scenario 1: Dormir produces a liquid herbal sleep remedy. Production begins in the Blending Department. All materials are added at the beginning of the blending process. Output is measured in ounces. The production data for June are as follows Production Units in process, June 1, 70% complete* 6,000 Units completed and transferred out36,000 Units in process, June 30, 40% complete. 12,000 With respect to conversion cost Complete the physical flow schedule given below. There are a number of useful relationships. For example, Units Started and Completed Units to Account for: Units in BWIP Units started Total units to account for Units accounted for: Units Completed From: BWIP Started and completecd and Units Started Units in BWIP Total units accounted for Prepare the Equivalent Unit Schedules for FIFO and Weighted Average by completing the Table below. Since inputs are non-uniform, equivalent units must be calculated separately for calculated for materials and conversion inputs. If an amount box does not require an entry, leave it blank or enter "0 FIFO WEIGHTED AVERAGE Direct Materials Conversion Direct Materials Conversion Units Completed Units Started and Completed Units in BWIP x Fraction to Complete Units in EWIP x Fraction Complete Equivalent Units Using the following cost data for the Blending Department for the month of June, calculate the unit cost for FIFO and Weighted Average (complete the table following cost data). The unit cost is the sum of the unit materials cost and the unit conversion cost. Round unit cost to two decimal places. Costs: Work in Process, June 1: Direct materials$600 Conversion costs210 Total work in process $810 Current costs: Direct materials Conversion costs Total current costs $7,560 1,830 $9,390 FIFO WEIGHTED AVERAGE Materials Conversion Total Materials Conversion Total Numerator (costs) Denominator (equivalent units) Unit Cost Calculate the cost of goods transferred out and the cost of EWIP for both FIFO and Weighted Average by completing the following Tables (Round unit cost to two decimal places.): FIFO Costs, BWIP Cost to Complete BWIP Cost of Goods Started and Completed Cost of Goods Transferred Out Weighted Average Cost of Goods Transferred Out Total Cost of FIFO Materials Conversion EWIP Equivalent units in EWIP Unit cost Cost of EWIP Total Cost of Weighted Average Equivalent units in EWIP Unit cost Cost of EWIP Show that the costs to account for equal the costs assigned for both FIFO and Weighted Average by completing the following information. Costs to account for: Materials Conversion EWIP Costs BWIP Costs added (current) Total costs to account for Weighted FIFO Average Cost of goods transferred out $ Cost of EWIP Total Cost Assigned
