Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
4.25 Transferred-in costs, FIFO costing. (30 min)
1 The equivalent units of work done in April 2010 in the
Finishing Department for transferred-in costs, direct materials and conversion costs are exactly as in Solution Exhibit A. Solution Exhibit A calculates the cost per equivalent unit of opening work in progress and of work done in April 2010 in the Finishing Department for transferred-in costs, direct materials and conversion costs. Solution Exhibit 4.25B
summarises total Finishing Department costs for April 2010, and assigns these costs to units completed and transferred out and to units in closing work in progress using the FIFO method.
Journal entries a Work in Progress – Finishing Department
103,566 Work in Progress –
Forming Department 103,566 Cost of goods completed and transferred out during April from the Forming Department to the Finishing Department.
b Finished Goods
166,723 Work in Progress – Finishing Department
166,723 Cost of goods completed and transferred out during April from the Forming Department to the Finishing Department
Solution Exhibit Ab Step 3: Calculate equivalent unit costs under the FIFO method, Finishing Department of Sligo Toys for April 2010.
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