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81 5. You get two cost per unit figures when using FIFO (1.e., you have two different batches of finished goods) versus one with WA.
81 5. You get two cost per unit figures when using FIFO (1.e., you have two different batches of finished goods) versus one with WA. The WA per-unit cost figure is a weighted average of last period's costs and this period's costs. However, if the goods are transferred to a subsequent processing department, they are transferred at one average cost, regardless of which method is used. This is shown in the next example. Example 2 (second processing department) Let's extend the previous problem by assuming that Young Turk processes its product through two departments (Departments A and B, respectively). You are given the following information regarding Department B. DM is added at the end of the process in Department B. COSTS Units TIC DM CC Beginning WIP 15,000 $18,600 $0 $13,700 $32,300 TIC: 2% complete DM: % complete CC: 70% complete Units trans, in from Dept. A 180,000 Units completed this period 160,000 Current period costs WA: $222,840 $240,000 $152,000 $614,840 FIFO: $222,660 $614,660 Total ? Ending WIP TIC: % complete DM: % complete CC: 25% complete Required: 1. Cost out inventories assuming WA is used in both departments. 2. Cost out inventories assuming FIFO is used in both departments
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