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Posted: June 17th, 2023
Dama Company produces womenâs blouses and uses the FIFO method
FIFO METHOD, UNIT COST, VALUATION OF GOODS TRANSFERRED OUT AND ENDING WORK IN PROCESS Dama Company produces womenâs blouses and uses the FIFO method to account for its manufacturing costs. The product Dama makes passes through two processes: cutting and sewing. During April, Damaâs controller prepared the following equivalent units schedule for the cutting department:DirectConversionMaterialsCostsUnits started and completed40,00040,000Units, beginning work in process:10,000 * 0%ââ10,000 * 50%â5,000Units, ending work in process:20,000 * 100%20,000â20,000 * 25%â5,000Equivalent units of output60,000 50,000Costs in beginning work in process were direct materials, $20,000; conversion costs, $80,000. Manufacturing costs incurred during April were direct materials, $240,000; conversion costs, $320,000.Required:1. Prepare a physical flow schedule for April.2. Compute the cost per equivalent unit for April.3. Determine the cost of ending work in process and the cost of goods transferred out.4. Prepare the journal entry that transfers the costs from cutting to sewing.
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