Question

The following information is known about a company’s second department in the process costing system for the latest period:

Beginning Inventory: 12000 units that are 60% complete for conversion costs

Ending Inventory 15000 units that are 40% complete for conversion costs

Units transferred in from the first department 30000 units

Materials are added at the end of the process in Department 2

	Costs
	Materials	Conversion Costs	Transferred in Costs
Beginning Inventory (prior period costs)	$41,250	$47,120	$50,000
Current period Costs	$114,750	$92,880	$100,000

Required:

1. Choose either the Weighted Average Approach or the FIFO Approach to for part 1 of this problem. Write the method that you have chosen CLEARLY at the top of the production cost report. If this piece of information is not included, you will receive no points for this problem – no exceptions – good accountants pay attention to details!! ?
2. Prepare the production cost report for the method you have chosen.
3. Without reworking your problem, identify and explain the three places that the calculation differs in the production cost report for the method you did not choose in part 1. Clearly explain your answer – number the items 1-3. DO NOT PROVIDE ANY ACTUAL CALCULATIONS USING NUMBERS FOR THIS PART OF THE PROBLEM.

Answer 1