Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 43

FIFO Process Costing

Pantanal, Inc., manufactures car seats in a local factory. For costing purposes, it uses a first-in, first-out (FIFO) process costing system. The factory has three departments: Molding, Assembling, and Finishing. Following is information on the beginning work-in-process inventory in the Assembling Department on August 1:

	Costs	Degree of Completion
Work-in-process beginning inventory (10,000 units) Transferred-in from Molding	$ 98,000	100%
Direct materials costs	164,400	60
Conversion costs	61,000	40
Work-in-process balance (August 1)	$323,400

During August, 102,000 units were transferred in from the Molding Department at a cost of $2,142,000 and started in Assembling. The Assembling Department incurred other costs of $1,164,600 in August as follows:

	August Costs
Direct materials costs	$ 939,600
Conversion costs	225,000
Total August costs	01,164,000

At the end of August, 16,000 units remained in inventory that were 90 percent complete with respect to direct materials and 50 percent complete with respect to conversion.

Required

Compute the cost of goods transferred out in August and the cost of work-in-process ending inventory.