Management wants to know the difference between using the weighted average and FIFO methods.

Every picture frame passes through two departments: the assembly department and the finishing department. This problem focuses on the assembly department. The process-costing system at Clear View has a single direct-cost category (direct materials) and a single indirect-cost category (conversion cost). Direct materials are added when the assembly department process is 10% complete. Conversion costs are added evenly during the assembly departments process.

Consider the following data for the assembly department in April 2014:

Physical unit Direct Conversion

(Frames) Materials Costs

Work in process April 1 60 $1530 $156

Started during April 2014 510

Completed during April 2014 450

Work in Process, April 30 120

Total Costs added during April 2014 $17,850 $11,544

Degree of completion: direct materials, 100%; conversion costs, 40%

Degree of completion: direct materials, 100%; conversion costs, 15%

Summarize the total assembly department costs for April 2014, and assign them to units completed (and transferred out) and to units in ending work in process using the weighted average method.

What issues should a manager focus on when reviewing the equivalent units calculation?

Summarize the total assembly department costs for April 2014, and assign them to units completed (and transferred out) and to units in ending work in process using the FIFO method.

Explain any difference between the cost of work completed and transferred out and the cost of ending work in process in the assembly department under the weighted-average method and the FIFO method. Should Clear Views managers choose the weighted-average method or the FIFO method? Explain briefly.

Here are the sheets that need to be filled out with the information:

Summarize the Flow of Physical Units and Compute Output in Equivalent Units;Weighted-Average Method of Process Costing, Assembly Department of Clear View for April 2014.

		Equivalent Units
	Physical	Direct	Conversion
Flow of Production	Units	Materials	Costs
Work in process, beginning
Started during current period
To account for
Completed and transferred out
during current period
Work in process, ending
Accounted for
Equivalent units of work done to date
Direct materials =
Conversion costs =

	Total
	Production	Direct	Conversion
	Costs	Materials	Costs
Work in process, beginning
Costs added in current period
Total costs to account for
Costs incurred to date
equivalent units of work done
Cost per equivalent unit
Assignment of costs:
Completed and transferred out
Work in process, ending
Total costs accounted for

FIFO Method

Equivalent Units

Physical

Direct

Conversion

Flow of Production

Units

Materials

Costs

Work in process, beginning

Started during current period

To account for

Completed and transferred out

Started and Completed

Work in process, ending

Accounted for

Equivalent units of work done to date

	Total
	Production	Direct	Conversion
	Costs	Materials	Costs
Work in process, beginning
Costs added in current period
Total costs to account for
Costs added in current period
Equivalent Units from row 65
Cost per Equivalent Unit
Assignment of costs:
Completed and transferred out :
WIP Beginning Inventory
Costs added to Beginning WIP
Total from Beginning Inventory
Started and Completed
Total WIP and Transferred Out
Work in process, ending
Total costs accounted for

The following table summarizes the costs assigned to units completed and those still in process under the weighted-average and FIFO process-costing methods

	Weighted Average	FIFO	Difference
Cost of units completed and transferred out
Work in process, ending
Total costs accounted for
Explain differences