The Stewart Company Had Computed the Flow of Units for Department

question 64

Essay

The Stewart Company had computed the flow of units for Department 123 for the month of July as follows: $\begin{array}{ll}\text { Work in process, July } 1 \text { : } & 10,000 \\\text { Started into production during July } & \underline{39,000} \\\text { Units to be accounted for } & \underline{49,000}\end{array}$ $\begin{array}{lrr}&\text { Beginning }&\text { Added during the }\\&\text { work in process }&\text { current month }\\\text { Materials } & \$ 20,800 & \$ 97,500 \\\text { Labour } & 5,200 & 34,920 \\\text { Factory overhead } & 4,800 & 32,980 \\\text { Total } & \$ 30,800 & \$ 165,400\end{array}$ Materials are added at the beginning of the process.There were 8,000 units of work in process at July 31.The work in process at July 1 was 70% complete as to direct labour and factory overhead costs,and the work in process at July 31 was 60% complete as to direct labour and factory overhead costs.What was the cost of the goods transferred out and in ending work in process using the FIFO method?

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Definitions:

Annual Benefits

Benefits or returns that are received on a yearly basis from investments, insurance policies, or employee benefit programs.

Compounded Monthly

Refers to the process of applying interest to an initial amount and any accumulated interest on a monthly basis.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.

Trust Fund

A fund comprised of a variety of assets intended to provide benefits to an individual or organization.