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FIFO Process Costing: Cost Conversions

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FIFO method is used to account for its work-in-process inventories.

Begin WIP inventory:

Direct materials $900
Conversion costs $200

Current period cost
Direct materials $12,000
Conversion costs $6,000

Quantity information:

Begin Inventory 500 Units (60% complete as to materials)
(53% complete as to conversion)
Current period units started 5000 Units
Ending Inventory 2,200 Units (40% complete as to materials)
(20% complete as to conversion)

Using FIFO method compute:

Cost of goods transferred out?
Cost of Ending inventory?

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Solution Summary

This solution shows how to use the fist in first out (FIFO) accounting method for the given inventory.

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