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 8,000 10,000 Costs: Transferred in $45,300 Direct materials $22,000 $13,800 Conversion costs $16,700 Current production: 25,000 Units started ? 30,000 35,000 Units transferred out Costs: Transferred in Direct materials $56,250 $39,550 Conversion costs $106,500 $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: Units, beginning work in process 10,000 Units started in February (transferred in) 25,000 35,000 Total units to account for Units accounted for: Units completed and transferred out: Started and completed 20,000 From beginning work in process 10,000 Units, ending work in process 5,000 35,000 Total units accounted for Feedback Check My Work a. The physical flow schedule traces the units in process regardless of their stage of completion. b. An equivalent units calculation Total Equivalent Units b. An equivalent units calculation Total Equivalent Units Direct Materials 25,000 Conversion Costs 30,000 c. Calculation of unit costs. Round your answer to the nearest cent V per unit 5.80 d. Cost of ending work in process and cost of goods transferred out. Cost of ending work in process: 25,450 Cost of goods transferred out: 173,100 e. A cost reconciliation Costs to account for 35,800 Beginning work in process 162,750 Costs incurred $198,550 Total costs to account for Costs accounted for $ 173,100 Transferred out Ending work in process 25,450 198,550 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 V 56,250 Materials Inventory 56,250 Work in Process-Molding 106,500 Conversion Costs-Control 106,500 (lWork in Process-Assembly 173,100 Work in Process-Molding 173,100 Feedback Check My Work 2. An example of journal entries showing the flow of costs is illustrated above Exhibit 6.5 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: Units, beginning work in process 8,000 Units started in February (transferred in) 30,000 Units accounted for Units completed and transferred out: Started and completed 27,000 From beginning work in process 8,000 Units, ending work in process 3,000 38,000 Total units accounted for Feedback Check My Work 3. Read the problem carefully. There are some differences in how the material additions are accounted for. b. An equivalent units calculation Total Equivalent Units 35,000 Direct Materials Conversion Costs 32,500 Transferred In 30,000 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 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: $ Cost of goods transferred out: $ 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: Cost of goods transferred out: $ 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 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. Work in Process-Assembly 39,550 Materials Inventory 39,550 (b)Work in Process-Assembly 136,500