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 FIFO 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

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				10,000
Add: Units Started in Process				25,000
Total Units to account for:				35,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				10000
Units started and completed				20,000
Ending Work in Process				5,000
Total Units to be accounted for:				35,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	40%	4,000
Units started and completed			100%	20,000	100%	20,000
Ending Work in Process			100%	5,000	80%	4,000
Total Equivalent units				25,000		28,000
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			56,250		103,500
Equivalent Units			25,000		28,000
Cost per Equivalent unit			2.25		3.696
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (10000 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					35800
Material			0	2.25	0
Conversion Cost			4,000	3.696	14784
Cost of units completed from Beg WIP					50584
Units started and Transferred out (20,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			20,000	2.25	45000
Conversion Cost			20,000	3.696	73920
Total Cost of Units completed and transferred out:					118920
Ending Work in process (5,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			5,000	2.25	11250
Conversison Cost			4,000	3.696	14784
Total cost of Ending Work in process:					26,050
Cost reconciliation:
Cost to be accounted for:
Cost of Beginning WIP					35800
Currnet manufacturing cost (56250+103500)					159750
Total cost to be accounted for					195550
Cost accounted for:
Cost of units transferred out			(50584+118920)		169504
Cost f Ending Wip					26050
Cost accounted for					195554