Topic: Process Cost Accounting - FIFO Costing Method
The learning objective of this Assignment No. 02 is to encourage the students for
applying their knowledge about FIFO costing, which they have learned during
lesson No. 01 to 27. This will enhance the understanding of the students about
FIFO costing method.
After solving this Assignment No. 02 the learners (students) are well aware about
the FIFO costing techniques used for calculating the closing WIP cost and the
finished goods inventory.
Science Developers – a lab instruments manufacturing and marketing company is working in far
flung hilly areas of world renowned Scientific Country. At present, the company is involved in
manufacturing and marketing of one of its famous chemical brand – Chemical. The Country’s
Government has recently given the company an order for delivering Chemical in 500,000 lbs.
The Company has started its work on the project on 1st February, 2012. The company has the
policy to cost material and units on the FIFO method.
On 30th April, 2012, Mr. Processor – In-charge of processing department, presented following
monthly report to Mr. Chief. This report contains information about inventories, costs and
production as under:
March 30 April 30
Materials 100,000 lbs 80,000 lbs
Materials cost Rs. 100,000 ----
Work In Process Inventories:
All Materials, 40% completed as to labor and FOH 20,000 units
Cost Rs. 84,000
All Materials, 331/3% completed as to labor & FOH 30,000 units
Finished goods inventory 40,000 units 24,000 units
Cost Rs. 448,000
Purchase of Materials 440,000 lbs @ Rs. 1.10 per lb
Transferred to production 460,000 lbs
Production ratio – 2 lbs: 1 of Chemical
Completed during the month 220,000 units
Direct Labor Rs. 1,198,800
Factory Overhead Rs. 421,800
Calculate the following: (6 marks each)
a) Equivalent production units of material, labor and FOH
b) Unit costs of three cost elements
c) Cost of units transferred to finish goods inventory, using FIFO costing method.
d) Cost of the ending Work in process inventory
e) Number of units sold and the cost of the finished goods inventory on April 30, 2012 using
the FIFO method.
Please read the following instructions carefully before preparing the assignment solution:
All Supporting Formulas and calculations are required as they carry marks.
Please Discuss here about this assignment.Thanks
how to solve it
Requirement# 02 Unit Cost = Total Cost / Total Production Material = 484000/ Labor FOH
tariq bhai please share the idea solution
kindly share the solution as soon as possible
Please download the idea solution along with Answere.
Just download cost of production report-I (which I upload few days back) it will help you 80% insallah.
|Units from proceeding departement (Opening W-I-P)||20,000|
|Units Started in Process||230,000|
|Units Completed & Transfer||220,000|
|Units in W-I-P||30,000|
|Cost to be Accounted||Total Cost||Total P.U.C|
|Cost Added By Department|
|Material||(460000 x 1.1)||506,000||2.024|
|Total Per Units Completed & Transfer||(220,000 x 8.720694)||1,918,552.73|
|Opening W-I-P Cost|
|Labour||(20,000 x 60% x 4.9)||59444.628|
|FOH||(20,000 x 60% x 1.74)||20915.7|
|Closing W-I-P Cost|
|Material||(30,000 x 100% x 2.024)||60720|
|Labour||(30,000 x 33.33% x 4.953719008)||49537.19|
|FOH||(30,000 x 33.33% x 1.742975207)||17429.75|
This is idea
Please upload the complete Solution file
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