Answer the following questions using the information below:
Samantha's Office Supplies manufactures desk organizers in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for February 2015 are as follows:
$\begin{array} { l }
\text { WIP, beginuing inventory } 2 / 1 / 2015&51,000 \text { units } \
\text {Direct materials ( $ 100 \% $ complete) }\
\text {Conversion costs ( $ 50 \% $ complete) }\\
\text { Started during February } & 170,000 \text { units } \
\text { Completed and transferred out } & 180,000 \text { units } \\
\text { WIP, ending inventory } 2 / 28 / 2015 & 26,000 \text { units }\
\text {Direct materials ( $ 100 \% $ complete) }\
\text { Conversion costs ( $ 25 \% $ complete)}\\
\text { Costs: }\\text { WIP, beginning inventory: }\
\text { Direct materials } & \$ 280,000 \
\text { Conversion costs } & 80,000 \
\text { Direct materials added } & 408,000 \
\text { Conversion costs added } & 264,000
\end{array}$

-What is the total costs of all the units that were initially in the beginning work-in-process inventory and were subsequently shipped? Take into account the costs related to the completion of the conversion of the units during the month.Use the FIFO method of process costing.

Question

Answer the following questions using the information below:
Samantha's Office Supplies manufactures desk organizers in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for February 2015 are as follows:
 $\begin{array} { l  }
\text { WIP, beginuing inventory } 2 / 1 / 2015&51,000 \text { units } \
 \text {Direct materials ( $ 100 \% $ complete) }\
 \text {Conversion costs ( $ 50 \% $ complete) }\\
\text { Started during February } & 170,000 \text { units } \
\text { Completed and transferred out } & 180,000 \text { units } \\
\text { WIP, ending inventory } 2 / 28 / 2015 & 26,000 \text { units }\
 \text {Direct materials ( $ 100 \% $ complete) }\
 \text { Conversion costs ( $ 25 \% $ complete)}\\
\text { Costs: }\\text { WIP, beginning inventory: }\
\text { Direct materials } & \$ 280,000 \
\text { Conversion costs } & 80,000 \
\text { Direct materials added } & 408,000 \
\text { Conversion costs added } & 264,000
\end{array}$

-What is the total costs of all the units that were initially in the beginning work-in-process inventory and were subsequently shipped? Take into account the costs related to the completion of the conversion of the units during the month.Use the FIFO method of process costing.

Quizplus · Accepted Answer

The total cost includes the beginning WIP costs ($280,000 for direct materials and $80,000 for conversion costs) plus the additional conversion costs needed to complete these units. Since the beginning inventory was 50% complete for conversion, the remaining 50% of conversion costs must be added. The cost of conversion per unit is calculated based on the total conversion costs added during the month divided by the equivalent units for conversion.

Answer the Following Questions Using the Information Below: Samantha's Office

Answer the Following Questions Using the Information Below:
Samantha's Office