Question

Muskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February: Beginning inventories for Molding; Assembly (first number for molding second number for assembly) Physical units 10,000;8,000 Costs: Transferred in ? ;$ 45,200 Direct materials $ 22,000; ? Conversion costs $ 13,800 ;$ 16,800 Current production: Units started 25,000 ; ? Units transferred out 30,000 ; 35,000 Costs: Transferred in ? ; ? Direct materials $ 56,250 ; $ 39,550 Conversion costs $103,500 $136,500 Percentage of completion: Beginning inventory 40% ; 50% Ending inventory 80 ; 50 Required: 1. Using the weighted average method, prepare the following for the Molding Department: a. A physical flow schedule b. An equivalent units calculation c. Calculation of unit costs. Round to four decimal places. d. Cost of ending work in process and cost of goods transferred out e. A cost reconciliation

Answer 1

a)Physical Flow Schedule

		MOLDING
	UNITS
BEGINNING WORK IN PROGRESS	10,000
UNITS STARTED IN FEBURARY	25,000
TOTAL UNIITS TO ACCOUNT FOR	35,000
UNITS COMPLETED AND TRANSFERRED OUT
BEGINNING WORK IN PROGRESS	10,000
UNITS STARTED AND COMPLETED	20,000
ENDING WORK IN PROGRESS	5,000
TOTAL UNITS ACCOUNTED FOR	35,000

b)EQUIVALENT UNITS CALCULATION

	DIRECT MATERIAL	CONVERSION COST
UNITS COMPLETED	30,000	30,000
ENDING WORK IN PROGRESS	5,000	4,000
TOTAL EQUVIALENT UNITS	35,000	34,000

c)CALCULATION OF UNIT COSTS

	DIRECT MATERIAL	CONVERSION COST
COST BEGINNING WORK IN PROGRESS	22,000	13,800
COST ADDED	56,250	103,500
TOATL COST	78,250	117,300
TOTAL EQUVIALENT UNITS	35,000	34,000
COST PER UNIT	2.2357	3.45

TOTAL COST=2.2357+3.45=5.6857

d.)cost of ending work in process & cost of goods transferred out

COST OF ENDING WORK IN PROGRESS=5000*2.2357+4000*3.45=24,979

COST OF GOOD TRANSFERRED OUT=30,000*5.6857=170,571

e)Reconciliation

	$
BEGINNING WORK IN PROCESSS COST (22000+13800)	35,800
COST ADDED($56,250+103,500)	159,750
TOTALCOST TO ACCOUNT FOR	195,550
COST OF GOODS TRANSFERRED OUT	170,571
COST IN ENDING WORK IN PROGRESS	24,979