FIFO Process Costing Problem

Bemidji Manufacturing produces laptop computers in three departments: assembly, testing and packaging. Prior to the start of the production process, all of the materials and component parts are placed into a "kit." Manufacturing begins when the assembly department receives a kit and begins putting the computer together. Therefore, all materials are added at the beginning of the work in the assembly department. Conversion costs are added evenly throughout the assembly process. Assume the Assembly Department of Bemidji Manufacturing began August with 800 units in its work-in-process inventory; assembly on these units was three-fourths complete at the beginning of the month. During the month of August, 3,000 units were started in the Assembly Department. At the end of the month, 300 of the units started were still in process; assembly on these units is two-thirds complete. The costs associated with production in assembly during the month of August were as follows: cost of units in beginning work in process inventory $228,000; costs of materials used in August $630,000; and cost of direct labor and manufacturing overhead for August $527,000.

Required:

1. Determine the cost of goods completed and transferred out of the Assembly Department.

2. Determine the cost of the ending work-in-process inventory in the Assembly Department.