FIFO Method, Two-Department Analysis Healthway uses a process-costing system to compute the unit costs of the minerals that it produces. It has three departments: Mixing, Tableting, and Bottling. In Mixing, at the beginning of the process all materials are added and the ingredients for the minerals are measured, sifted, and blended together. The mix is transferred out in gallon containers. The Tableting Department takes the powdered mix and places it in capsules. One gallon of powdered mix converts to 1,600 capsules. After the capsules are filled and polished, they are transferred to Bottling where they are placed in bottles, which are then affixed with a safety seal and a lid and labeled. Each bottle receives 50 capsules. During July, the following results are available for the first two departments (direct materials are added at the beginning in both departments): Mixing Tableting Beginning inventories: Physical units 5 gallons 4,000 capsules Costs: Direct materials $120 $32 Direct labor 1128 20 2 ? ? Overhead Transferred in 140 Current production: 125 gallons 198,000 capsules Transferred out Ending inventory 6 6000 Costs: Direct materials $3,144 $1,584 Transferred in 7 Direct labor 4,096 1,944 Overhead ? ? Percentage of completion: Beginning inventory 40 50% Ending inventory 50 40 Overhead in both departments is applied as a percentage of direct labor costs. In the Mixcing Department, overhead is 200 percent of direct labor. In the Tableting Department, the overhead rate is 150 percent of direct labor. Required: 1. Prepare a production report for the Mixing Department using the FIFO method. Follow the live steps outlined in the chapter. If required, round your cost per equivalent unit answers to three decimal places and use them in subsequent computations. Round all other calculations and final answers to the nearest dollar. Healthway Mixing Department Production Report for July 20xx Unit Information Units to account for: Units, beginning work in process 5 Units started 126 131 Total units to account for Units accounted for: Equivalent Units Physical Flow Direct Materials Conversion Costs 120 120 120 Units started and completed Units, beginning work in process Units, ending work in process S 3 61 3 Total units accounted for 131 126 126 Costs to account for: Direct Materials Conversion Costs Total 120 394 504 Costs in beginning work in process Costs added by department 3,144 12,288 15,432 Total costs to account for 3,261 12,672 15,936 24.95 x 97.5238 x 122 X Cost per equivalent unit Costs accounted for : Transferred Out Ending Work in Process Total 14,697 14,697 Goods started and completed Units, beginning work in process Prior period 500 504 293 293 Current period Ending work in process: Direct materials 150 150 Conversion costs 293 293 Total costs accounted for 15,494 413 15,937 Feedback Check My Work Five Steps of a Production Report: 1. Prepare physical flow of units to be accounted for. 2. Calculate equivalent units for direct materials and conversion costs. 3. Calculate unit cost. 4. Value inventories (goods tranferred out and EWIP). 5. Compare costs assigned to costs to account for (reconciliation). 2. Prepare a production report for the Tableting Department using the FIFO method. Follow the five steps outlined in the chapter. If required, round your cost per equivalent unit answers to four decimal places and use them in subsequent computations. Round all other calculations and final answers to the nearest dollar. If an amount is zero, enter "O". Healthway Tableting Department Production Report for July 20XX Unit Information Units to account for: Units, beginning work in process , Units started 4,000 200,000 200,000 Total units to account for Units accounted for: Equivalent Units Physical Flow Transferred In Direct Materials Conversion Costs 190,000 194,000 190,000 190,000 Units started and completed Units, beginning work in process 4,000 2,000 Units, ending work in process 6,000 6,000 2.400 Total units accounted for 204,000 194,000 X 200,000 194.400 Un man LIDI Units to account for: Units, beginning work in process Units started 4,000 200,000 200,000 Total units to account for Units accounted for: Equivalent Units Conversion Physical Flow Transferred In Direct Materials Costs 1900 190,000 191,000 Units started and completed Units, beginning work in process Units, ending work in process 194,000 2,000 4,000 6.000 6.000 2,400 Total units accounted for 204,000 194,000 x 200,000 199,000 Cost Information Costs to account for: Transferred In Direct Materials Conversion Costs Total 140 50 222 Costs in beginning work in process Costs added by department 15.091 1.581 4,860 21,930 15.634 1,616 4.910 22,160 Total costs to account for Cost per equivalent unit Costs accounted for: 0.0775 0.0079 0.0245 0.1097 Transferred Out Ending Work in Process Total 21,321 21,321 Goods transferred out Units, beginning work in process: Prior period 222 222 49 Current period Ending work in process: Transferred in 465 465 49 X Direct materials Conversion costs 40 x 59 59 Total costs accounted for 21,592 571 22,163