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:

Ulldl Molding Assembly Beginning inventories: Physical units 10,000 8,000 Costs: Transferred in - $45,300 $22,000 $13,800 $16,700 25,000 ? 30,000 35,000 Direct materials Conversion costs Current production: Units started Units transferred out Costs: Transferred in Direct materials Conversion costs Percentage of completion: Beginning inventory ? $56,250 $40,250 $106,500 $136,500 40% 50% Ending inventory 80 50 Required: 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 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) Work in Process-Molding Materials Inventory (b) Work in Process-Molding 100 (c) 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: Total units to account for Units accounted for: Units completed and transferred out: 10 Total units accounted for