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Title: Problem 20-6A
QA_Ori:
Part 1
TAMAR CO.
Process Cost Summary – FIFO Method
For Month Ended May 31
Costs charged to Production
Costs of beginning goods in process
Direct materials...................................................................$ 19,800
Unit cost information
Units to account for Units accounted for
Equivalent units of production
Direct
Materials
Direct
Labor
Factory
Overhead
Units to complete beginning goods in process
Direct materials (3,000 x 0%)............................... 0 EUP
Cost per EUP
Direct
Materials
Direct
Labor
Factory
Overhead
Costs incurred this period...................... $ 496,800 $1,203,300 $ 962,640
EUP
EUP
EUP
Cost assignment and reconciliation
Costs transferred out
Cost of beginning goods in process............................... $ 241,740
Part 2
May 31 Finished Goods Inventory................................................2,667,840
Title: Problem 20-7A
QA_Ori:
2. Equivalent units of production—FIFO
Direct Direct
Equivalent units of production Materials Labor
Units to complete beginning goods in process
Direct materials (37,500 x 40%).................................... 15,000
3. Cost per equivalent unit of direct materials and direct labor—FIFO
Direct Direct
Materials Labor
Costs incurred this period............................................... $ 505,035 $ 396,568
EUP
EUP
4. Assignment of costs to output of department—FIFO
Costs of goods transferred out
Cost of beginning goods in process inventory................
Direct materials.............................................................$74,075.00
Direct labor.................................................................... 28,493.00 $ 102,568.00
Title: Problem 20-8A
QA_Ori:
Part 1: Equivalent units with respect to direct materials and direct labor
Direct Direct
Equivalent units of production (EUP) Materials Labor
Units to complete beginning goods in process
Direct materials (60,000 x 0%)............................... 0
Part 2:
Cost per equivalent unit of production
Direct
Materials
Direct
Labor
Costs incurred this period................................................ $ 2,220,000 $ 3,254,000
÷ Equivalent units of production.......................................820,000 EUP 706,000 EUP
Cost per equivalent unit of production*............................
$2.71 per EUP $4.61 per EUP
Part 3: Assigning product costs to units
Cost assignment and reconciliation
Costs transferred out
*Rounded to two decimal places. **This differs from the sum of the total direct materials cost and the total
direct labor costs ($2,640,000 + $3,393,000 = $6,033,000) due to rounding.
Part 4:
MEMORANDUM
TO:
FROM:
DATE:
RE: Percentage of Completion Error Analysis
If the units in ending inventory are 60% complete instead of 30% with respect to
labor, the number of equivalent units in ending inventory with respect to labor is
Regarding financial statements, this error causes an overstatement of cost of
