In: Accounting
FIFO Method, Two-Department Analysis
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:
Molding | Assembly | |||
Beginning inventories: | ||||
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 |
Compute the following. For interim computations, carry amounts
out to four decimal places. Round your final answers to the nearest
dollar.
Cost of ending work in process: $__
Cost of goods transferred out: __
A cost reconciliation. When necessary, round equivalent cost per unit to four decimal places, and round all other amounts to the nearest dollar.
Costs to account for: | |
---|---|
Beginning work in process | $__ |
Costs incurred | __ |
Total costs to account for | $__ |
Costs accounted for: | |
---|---|
Transferred out | $__ |
Ending work in process | __ |
Total costs accounted for | $__ |
Note: Cost reconciliation totals differ by $1 due to rounding error.
Prepare journal entries that show the flow of manufacturing costs for the Assembly Department. (a) Materials are added at the end of the process, (b) conversion costs are recorded, and (c) the units are transferred to Finished Goods.
(a) | Work in Process-Assembly | ||
Materials Inventory | |||
(b) | Work in Process-Assembly | ||
Conversion Costs-Control | |||
(c) | Finished Goods | ||
Work in Process-Assembly |
Total costs accounted for:
Cost of units started and completed................................................(27,000 × $11.0133)$297,359*
Cost of units in beginning work in process:..................................................
Prior-period costs62,000..................................
Current cost to finish units:.......................
Direct materials (8,000 × $1.13)9,040....................
Conversion costs (4,000 × $4.20)16,800
Total costs of goods transferred out...................$385,199
Costs in ending work in process:Conversion (1,500 × $4.20)..............................$6,300
Transferred in (3,000 × $5.6833)......................17,050*
Total costs in ending work in process.................23,350
Total costs accounted for.....................................$408,549
*Rounded.
Costs to account for:Beginning work in process...................................$62,000
Costs incurred........
Journal entries:
Work in Process—Assembly..........39,550
Materials Inventory.....................39,550
Conversion Costs—Control......136,500*
Finished Goods................................385,287
Work in Process—Assembly....385,287
*Conversion costs are not broken into direct labor and overheadcomponents