Question

Refer to QS 16-21. Using the FIFO method, assign direct materials costs to the roasting department’s output—specifically, the units transferred out to the mixing department and the units that remain in process in the roasting department at month-end.

Short answer

Total costs assigned is $30,070

Step-by-step solution

Meaning of Direct materials

Direct materials are theresources and materials used to produce a product that can be immediately linked to that product. Typically, a product's bill of materials contains a list of the materials recognised as direct materials.

Meaning of Work-in-process

Materials finished up during the production process are known as work-in-progress inventory. Even though they can be kept to one side in a buffer storage area, these products are mostly found within the manufacturing area.

Determining total cost assigned

Cost transferred out
Cost of direct materials in the beginning WIP	$2,170
Costs to complete beginning WIP
Direct materials	930
Cost of units started and completed this period.
Direct materials	23,250
Total cost transferred out.		$26,350
Cost of ending work-in-process inventory
Direct materials		3,720
Total costs assigned		$30,070