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

Required:

1. Using the FIFO method, prepare the following for the Molding Department:

a. A physical flow schedule

Muskoge Company Molding Department Physical Flow Schedule

Units to account for:
From beginning work in processStarted and completedUnits, ending work in processFrom beginning work in process		From beginning work in process
Started and completedUnits, ending work in processUnits started in February (transferred in)Units started in February (transferred in)		Units started in February (transferred in)
Total units to account for		fill in the blank 225667066047fe8_5
Units accounted for:
Units completed and transferred out:
From beginning work in processStarted and completedUnits started in February (transferred in)Started and completed	Started and completed
From beginning work in processUnits started in February (transferred in)From beginning work in process	From beginning work in process
From beginning work in processUnits, ending work in processUnits started in February (transferred in)Units, ending work in process	Units, ending work in process
Total units accounted for		fill in the blank 225667066047fe8_12

b. An equivalent units calculation

	Total Equivalent Units
Direct Materials	fill in the blank e5d8abfc2fb0f90_1
Conversion Costs	fill in the blank e5d8abfc2fb0f90_2

c. Calculation of unit costs. Round your answer to the nearest cent. $fill in the blank e5d8abfc2fb0f90_3 per unit

d. Cost of ending work in process and cost of goods transferred out. Cost of ending work in process: $fill in the blank e5d8abfc2fb0f90_4 Cost of goods transferred out: $fill in the blank e5d8abfc2fb0f90_5

e. A cost reconciliation.

Costs to account for:
Beginning work in process	$fill in the blank e5d8abfc2fb0f90_6
Costs incurred	fill in the blank e5d8abfc2fb0f90_7
Total costs to account for	$fill in the blank e5d8abfc2fb0f90_8

Costs accounted for:
Transferred out	$fill in the blank e5d8abfc2fb0f90_9
Ending work in process	fill in the blank e5d8abfc2fb0f90_10
Total costs accounted for	$fill in the blank e5d8abfc2fb0f90_11

2. Prepare journal entries that show the flow of manufacturing costs for the Molding Department. (a) Materials are added at the beginning of the process, (b) conversion costs are recorded, and (c) units are transferred to the Assembly Department.

(a)	Accounts PayableCashConversion Costs-ControlMaterials InventoryWork in Process-Molding	- Select -
	CashFinished GoodsMaterials InventoryWork in Process-Assembly		- Select -
(b)	CashConversion Costs-ControlCost of Goods SoldMaterials InventoryWork in Process-Molding	- Select -
	CashConversion Costs-ControlFinished GoodsWork in Process-Assembly		- Select -
(c)	CashConversion Costs-ControlMaterials InventoryWork in Process-Assembly	- Select -
	CashFinished GoodsWork in Process-AssemblyWork in Process-Molding		- Select -

3. Repeat Requirements 1 and 2 for the Assembly Department.

a. A physical flow schedule

Muskoge Company Assembly Department Physical Flow Schedule

Units to account for:
Started and completedUnits, beginning work in processUnits, ending work in process		- Select -
Started and completedUnits, ending work in processUnits started in February (transferred in)		- Select -
Total units to account for		fill in the blank a01b09fb201f064_5
Units accounted for:
Units completed and transferred out:
Started and completedUnits, beginning work in processUnits started in February (transferred in)	- Select -
From beginning work in processStarted and completedUnits, ending work in process	- Select -
Units, beginning work in processUnits, ending work in processUnits started in February (transferred in)	- Select -
Total units accounted for		fill in the blank a01b09fb201f064_12

b. An equivalent units calculation

	Total Equivalent Units
Direct Materials	fill in the blank c371ab034064ffc_1
Conversion Costs	fill in the blank c371ab034064ffc_2
Transferred In	fill in the blank c371ab034064ffc_3

c. Calculation of unit costs. If required, round your intermediate computations and final answer to four decimal places and use the rounded answer in subsequent computations. $fill in the blank c371ab034064ffc_4 per unit

d. 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: $fill in the blank c371ab034064ffc_5 Cost of goods transferred out: $fill in the blank c371ab034064ffc_6

e. 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	$fill in the blank c371ab034064ffc_7
Costs incurred	fill in the blank c371ab034064ffc_8
Total costs to account for	$fill in the blank c371ab034064ffc_9

Costs accounted for:
Transferred out	$fill in the blank c371ab034064ffc_10
Ending work in process	fill in the blank c371ab034064ffc_11
Total costs accounted for	$fill in the blank c371ab034064ffc_12

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)	Accounts PayableCashConversion Costs-ControlMaterials InventoryWork in Process-Assembly	- Select -
	Accounts PayableCashCost of Goods SoldFinished GoodsMaterials Inventory		- Select -
(b)	Accounts PayableCashConversion Costs-ControlMaterials InventoryWork in Process-Assembly	- Select -
	Accounts PayableCashConversion Costs-ControlCost of Goods SoldFinished Goods		- Select -
(c)	Accounts PayableCashConversion Costs-ControlFinished GoodsMaterials Inventory	- Select -
	Accounts PayableCashCost of Goods SoldFinished GoodsWork in Process-Assembly		- Select -