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Managerial Accounting

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Cost Assignment Report: FIFO Process Costing, Did Cost Change?

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Below is the cost assignment report for a FIFO process costing system. The report is only partially complete.

Cost Assignment Report
EU Cost per EU Direct Materials Conversion costs
Costs in beg WIP inventory \$15,800 \$5,000
Costs to complete B:
Conversion costs 6,000 \$1.25 \$7,500
Started and completed:
Direct Materials 396,000 \$1.58 \$625,680
Conversion Costs 396,000 \$x.xx \$xx,xxx
Ending inventory:
Direct Materials 5,400 \$x.xx \$xx,xxx
Conversion Costs 4,320 \$x.xx \$xx,xxx

At the beginning of the period, there were 10,000 units in beginning work in process. All materials are added at the beginning of the period and conversion costs are added evenly throughout production. Beginning units are 40% complete with respect to conversion costs.

What can you learn about costs from this report?

A

The costs of materials and labor per EU are identical in the current period as they were in the beginning units.

B

The costs of materials per EU are identical in the beginning and current period units but conversion costs have increased in the current period compared to the units in beginning inventory.

C

The costs of materials and labor per EU are both higher in the current period than they were in the beginning units.

D

The costs of materials and labor per EU are both lower in the current period than they were in the beginning units.