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31 August, 03:27

Pix Company has the following production data for March: no beginning work in process, units started and completed 31,000, and ending work in process 4,100 units that are 100% complete for materials and 40% complete for conversion costs. Pix uses the FIFO method to compute equivalent units. If unit materials cost is $4 and unit conversion cost is $13. The total costs to be assigned are $564,720, prepare the cost section of the production cost report for Pix Company using the FIFO approach.

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  1. 31 August, 04:34
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    unit beggining WIP 0

    Units started and completed 31,000

    Ending inventory 4,100

    Total physical units 35,100

    Equivalent units (materials)

    Units started and completed 31,000

    WIP materials (4,100 x 100%) 4,100

    Total units accounted for 35,100

    Equivalent units (conversion)

    Units started and completed 31,000

    WIP materials (4,100 x 40%) 1,640

    Total units accounted for 32.640‬

    Cost Incurred during March:

    35, 100 x 4 = 140,400

    32,640 x 13 = 1,044,480

    Total cost 1, 184,880

    Cost assigned to units transferred out

    31,000 x (4 + 13) = 527,000‬

    Cost of WIP

    4,100 x 4 = 16.400‬

    1,640 x 13 = 21,320‬

    Total 37,720‬

    Explanation:

    We need to do the count of physical units

    we need to calcualte the equivalent units:

    transferred + ending x completion percentage

    then the cost incurred

    and allocate cost to finished goods and the ending WIP based on the equivalent units of materials and conversion
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