CHAPTER 10

CHAPTER 10 - AVERAGE AND FIFO COSTING
TRUE OR FALSE
1.
TRUE
2.
TRUE
3.
TRUE
4.
FALSE
5.
TRUE
6.
TRUE
7.
FALSE
8.
TRUE
9.
TRUE
10.
TRUE

MULTIPLE CHOICE - THEORY
1.
B
11.
C
2.
A
12.
C
3.
A
13.
C
4.
B
14.
C
5.
A
15.
D
6.
C
7.
A
8.
A
9.
D
10.
A

Problem 1
1) FIFO
Units in process, beg.
Units started

6,000
42,000
48,000
Units completed & transferred (40,000)
IP beg.
6,000
Started & completed
34,000
Units in process, end
8,000
48,000
2) AVERAGE
Units in process, beg.
6,000
Units started
42,000
48,000
Units completed
Units IP end

40,000
8,000
48,000

80% 4,800
70% 4,200
100% 34,000 100% 34,000
10%
800 15% 1,200
39,600
39,400

100% 40,000
10%
800
40,800

100%
15%

40,000
1,200
41,200

Problem 2

1) FIFO
Units in process, beg.
Units started

5,000
35,000
40,000
Units completed & transferred (30,000)
IP beg.
6,000
Started & completed
24,000
Units in process, end
10,000
40,000

85% 5,100
75% 4,500
100% 24,000 100% 24,000
20% 2,000 30%
3,000
31,100
31,500

PAGE 2
2) AVERAGE
Units in process, beg.
Units started

5,000
35,000
40,000

Units completed
Units IP end

30,000
10,000
48,000

Problem 3
1)
Units in process beg.
Units started

100% 30,000
20%
2,000
32,000

100%
30%

300
2,000
2.300

Units comp. & transf. (1,700)
IP beg.
Started & completed
Units in process, end

300
1,400
600
2,300

40%
100%
40%

120
1,400
240
1,760

70%
100%
20%

2)
Unit cost -

540
Materials 3,714/1760
Conversion 2,258/1730
6,512

=
=

2.110227
1.305202
3.415429

3) Cost of units transferred out
From IP beg.
Cost last month
Cost added Mat. ( 120 x 2.110227)
Conversion ( 210 x 1.305202)
From units started & completed (1,400 x 3.415429)

540
253
274

4) Cost of ending inventory
Materials (240 x 2.110227)
Conversion ( 120 x 1.305202)

Problem 4 1) FIFO
Units in process, beg
Units started
Units Completed ( 17,000)
IP beg.
Started & completed
Units in process, end

30,000
3,000
33,000

1,067
4,782
5,849
507
156
663

8,000
14,000
22,000
8,000
9,000
5,000
22,000

70% 5,600
100% 9,000
80% 4,000
18,600

70%