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FIFO Process Costing

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Additional Information that is needed: Materials are added at the beginning of the production process and conversion costs are incurred uniformly. They use the FIFO method

Pacocha Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Pacocha Company uses the FIFO method to compute equivalent units. Production and cost data for the month of March are as follows.

Production Data-Bicycles Units Percent Complete
Work in process units, March 1 200 80%
Units started in production 1,000
Work in process units, March 31 200 40%

Cost Data-Bicycles Units Percent Complete
Work in process, March 1 $19,280
Direct materials 50,000
Direct labor 25,200
Manufacturing overhead 30,000

Production Data-Tricycles Units Percent Complete
Work in process units, March 1 100 75%
Units started in production 800
Work in process units, March 31 60 25%

Cost Data-Tricycles Units Percent Complete
Work in process, March 1 $6,125
Direct materials 38,400
Direct labor 15,100
Manufacturing overhead 20,000

Calculate the following for both bicycles and tricycles. (Round unit costs to 2 decimal places, e.g. 2.25. Use rounded amounts for successive calculations. Round all other answers to 0 decimal places, e.g. 125.)

(1) The equivalent units of production for materials and conversion.
(2) The unit costs of production for materials and conversion costs.
(3) The assignment of costs to units transferred out and in process at the end of the period.

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Solution Summary

The solution explains how to calculate equivalent units and account for costs using FIFO process costing

$2.19