Gable Company manufactures car seats in its Hartford plant Each car seat passes through the assembly department and the testing department. This problem focuses on the (Click the icon to view information about Gable Company's process-cusing system.) Data for the assembly department for October 2017 are as follows: Click the icon to view the assembly department data.) Click the icon to view the walghted average cost per aquivalent unt data and total costs accounted for.) Read the suite The process casting system at Cable Company has a single direct cost category (direct materials) and a single indirect-cost category (conversion costs) Direct materials are added at the beginning of the process. Conversion costs are added avenly during the process when the assembly department finishes work on each car seat It Immediately transferred to testing Gable Company uses the FIFO method of process costing Physical Units Direct Conversion Car Seats) Materials Costs Work in process October 1" 4,500 $1.102.500 $175875 Started during October 2017 20,500 Completed during October 2017 22,500 Work in process Odober 31 2.500 Total costs added during October 2017 $3997.500 $2059 125 'Degree of completion direct materials conversion costs GO "Degree of completion direct materials conversion costs, 75%. Direct Conversion Materials Costs Casts incurred to date 5 5.100 Ons 2.535.000 Divide by equivalent units of work done to date 25,000 24,375 5 204 Cast per equivalent unit for work done to data 104 Total Direct Conversion Production Custs Materials Costs Compcted and transferred out 6,930,000 $4,590 000 $ 2.340,000 Work in processending 705,000 510,000 195,000 Total costs accounted for 5 7,635,000 $ 5.100.000 5 2.535,000 Requirement 1. For cach cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedulic. (For amounts with a balance make sure to enter in the appropriate cel.) Equivalent Units Physical Direct Conversion Flow of Production Units Materials Costs Viork in process beginning Started during current period To account for Completed and transferred out during current period From beginning work in process Started and completed Work in process, ending Accounted for Equivalent units of work done in current period only Requirement 2. For each cost category, summariza total samhly department cost for Dichobar 2017 And calculate the cost per equivalent unit Hegin by summarizing the total costs to account for Total Conversion Direct Materials Production Costs Costs Work in process, beginning Costs added in current parlod Total costs to account for Nest calculate cel per equivalent unit for direct materials and conversion costs Direct Materials Conversion Casts Costs added in current period Divide by equivalent units of work done in current period Cost per equivalent unit for work done in current period Requirement 3. Assign total costs to units completed and transferred out and to units in ending work in process Begin by calculating the total from beginning inventury, then calculate the total costs accounted for (Abbreviation used, WIP - work in process. For amounts with a 50 balance, make sure to enter "O" in the appropriate cell.) Total Direct Conversion Production Coats Materials COAT Completed and transferred out Work in process, beginning Costs added to beginning WP in current period Toll from beginning inventory Started and completed Total costs of units completed and transferred out Work in process, ending Total costs accounted for Requirement 4. Explain any difference between the cost par Aquivalent unit in the assembly department under the weighted average mathod and the FIFO method The cost per equivalent unit differs between the two methods because each method ises different costs as the numerator of the calculation The FIFO method uses only the acts added during the current period And the weighted average methods costs from the beginning work-in-process well as costs added during the current period Both methods use diferent equivalent units in the denominator Requirement 5. Should Berriaris managers choose the weighted average method or the FIFO method? Explain briefly Begin by completing the table below that summarizes the costs assigned to unios completed and thuse til in process under the weighted average and FIFO process-coating methods. Weighted average FIFO Difference Cost of units completed and transferred out Work in processending Total costs accounted for Berran's managers should consider the firo method because even though it shows lower operating income and higher cost of goods sold, It lower taxes. Managers may have an incentive however, to use the weighted average method and show higher income If the managers' compensation increases with higher operating income or if there are doint covenants that would be violated by showing lower Income Anathar advantage of the FIFO method is that it provides battar information for managing the business because I KAAPS Separate the costs of the current period from costs incurred in previous periode Gable Company manufactures car seats in its Hartford plant Each car seat passes through the assembly department and the testing department. This problem focuses on the (Click the icon to view information about Gable Company's process-cusing system.) Data for the assembly department for October 2017 are as follows: Click the icon to view the assembly department data.) Click the icon to view the walghted average cost per aquivalent unt data and total costs accounted for.) Read the suite The process casting system at Cable Company has a single direct cost category (direct materials) and a single indirect-cost category (conversion costs) Direct materials are added at the beginning of the process. Conversion costs are added avenly during the process when the assembly department finishes work on each car seat It Immediately transferred to testing Gable Company uses the FIFO method of process costing Physical Units Direct Conversion Car Seats) Materials Costs Work in process October 1" 4,500 $1.102.500 $175875 Started during October 2017 20,500 Completed during October 2017 22,500 Work in process Odober 31 2.500 Total costs added during October 2017 $3997.500 $2059 125 'Degree of completion direct materials conversion costs GO "Degree of completion direct materials conversion costs, 75%. Direct Conversion Materials Costs Casts incurred to date 5 5.100 Ons 2.535.000 Divide by equivalent units of work done to date 25,000 24,375 5 204 Cast per equivalent unit for work done to data 104 Total Direct Conversion Production Custs Materials Costs Compcted and transferred out 6,930,000 $4,590 000 $ 2.340,000 Work in processending 705,000 510,000 195,000 Total costs accounted for 5 7,635,000 $ 5.100.000 5 2.535,000 Requirement 1. For cach cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedulic. (For amounts with a balance make sure to enter in the appropriate cel.) Equivalent Units Physical Direct Conversion Flow of Production Units Materials Costs Viork in process beginning Started during current period To account for Completed and transferred out during current period From beginning work in process Started and completed Work in process, ending Accounted for Equivalent units of work done in current period only Requirement 2. For each cost category, summariza total samhly department cost for Dichobar 2017 And calculate the cost per equivalent unit Hegin by summarizing the total costs to account for Total Conversion Direct Materials Production Costs Costs Work in process, beginning Costs added in current parlod Total costs to account for Nest calculate cel per equivalent unit for direct materials and conversion costs Direct Materials Conversion Casts Costs added in current period Divide by equivalent units of work done in current period Cost per equivalent unit for work done in current period Requirement 3. Assign total costs to units completed and transferred out and to units in ending work in process Begin by calculating the total from beginning inventury, then calculate the total costs accounted for (Abbreviation used, WIP - work in process. For amounts with a 50 balance, make sure to enter "O" in the appropriate cell.) Total Direct Conversion Production Coats Materials COAT Completed and transferred out Work in process, beginning Costs added to beginning WP in current period Toll from beginning inventory Started and completed Total costs of units completed and transferred out Work in process, ending Total costs accounted for Requirement 4. Explain any difference between the cost par Aquivalent unit in the assembly department under the weighted average mathod and the FIFO method The cost per equivalent unit differs between the two methods because each method ises different costs as the numerator of the calculation The FIFO method uses only the acts added during the current period And the weighted average methods costs from the beginning work-in-process well as costs added during the current period Both methods use diferent equivalent units in the denominator Requirement 5. Should Berriaris managers choose the weighted average method or the FIFO method? Explain briefly Begin by completing the table below that summarizes the costs assigned to unios completed and thuse til in process under the weighted average and FIFO process-coating methods. Weighted average FIFO Difference Cost of units completed and transferred out Work in processending Total costs accounted for Berran's managers should consider the firo method because even though it shows lower operating income and higher cost of goods sold, It lower taxes. Managers may have an incentive however, to use the weighted average method and show higher income If the managers' compensation increases with higher operating income or if there are doint covenants that would be violated by showing lower Income Anathar advantage of the FIFO method is that it provides battar information for managing the business because I KAAPS Separate the costs of the current period from costs incurred in previous periode