Required: How much of the conversion costs are allocated to ending WIP in the finishing department given that the company uses the FIFO method.

Answer:Production Cost Worksheet

Finishing Department

FIFO Method

Flow of production

Physical Units

Direct Materials

Conversion

Trans-In

Work in process, beginning

24,000

Started during period

64,000

To account for

88,000

Good units completed

Beginning work in process

24,000

24,000

4,800

Started and completed

44,000

44,000

44,000

44,000

Ending work in process

20,000

0

6,000

20,000

Accounted for

88,000

68,000

54,800

64,000

Costs

Totals

Direct Materials

Conversion

Trans-in

WIP, beginning

$52,000

Costs added during period

230,500

$34,000

$68,500

$128,000

Total costs to account for

$282,500

$34,000

$68,500

$128,000

Divided by equivalent units

68,000

54,800

64,000

Equivalent-unit costs

$ 3.75

$ 0.50

$1.25

$ 2.00

Assignment of costs

Work in process, beginning

$52,000

Completion of beginning

Direct Materials (24,000 $0.50)

$12,000

Conversion (4,800 $1.25)

6,000

$18,000

Total Beginning Inventory

70,000

Started and Completed (44,000 $3.75)

165,000

Total costs transferred out

235,000

Work in process, ending

Transferred-in (20,000 $2.00)

$40,000

Conversion (20,000 $1.25 0.30)

7,500

47,500

Costs accounted for

$282,500

Diff: 3

Conversion costs in ending WIP ending: 20,000 units x 30% complete x $1.25 equivalent unit costs = $7,500