Required information Problem 16-5AA FIFO: Process cost summary; equivalent units; cost estimates LO C3, C4, P4 [The following information applies to the questions displayed below.]
Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 22,200 units of product to finished goods inventory. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $496,800 of direct material costs and $2,165,940 of conversion costs were charged to production. Beginning work in process consisted of 3,000 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion. Of the 22,200 units completed, 3,000 were from beginning work in process. The remaining 19,200 were units started and completed during May. Assume that Tamar uses the FIFO method to account for its process costing system. Problem 16-5A Part 2 2. Prepare the journal entry dated May 31 to transfer the cost of completed units to finished goods inventory.