Question
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
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: | ||
Units, beginning work in process | ||
Units started in February (transferred in) | ||
Total units to account for | ||
Units accounted for: | ||
Units completed and transferred out: | ||
Started and completed | ||
From beginning work in process | ||
Units, ending work in process | ||
Total units accounted for |
Feedback
a. The physical flow schedule traces the units in process regardless of their stage of completion.
b. An equivalent units calculation
Total Equivalent Units | |
Direct Materials | |
Conversion Costs |
c. Calculation of unit costs. Round your answer to the nearest cent. $ per unit
d. Cost of ending work in process and cost of goods transferred out. Cost of ending work in process: $ Cost of goods transferred out: $
e. A cost reconciliation.
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 | $ |
Feedback
b. To calculate equivalent units, FIFO counts prior-period output in BWIP as belonging to the current period. All units are output in the current period.
c. To calculate unit cost, refer to the applicable formula in the textbook.
d. Costing out ending work in process is done by computing the cost of each input and then adding to obtain the total. The valuation of cost of goods transferred out is simplified as it is the total unit cost multiplied by the units completed.
e. Reconciliation is making sure that the costs assigned to goods or services completed and EWIP are equal to the costs to account 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 | ||
Conversion Costs-Control | |||
(c) | Work in Process-Assembly | ||
Work in Process-Molding |
Feedback
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 | ||
Units started in February (transferred in) | ||
Total units to account for | ||
Units accounted for: | ||
Units completed and transferred out: | ||
Started and completed | ||
From beginning work in process | ||
Units, ending work in process | ||
Total units accounted for |
Feedback
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 | |
Direct Materials | |
Conversion Costs | |
Transferred In |
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: $
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.
Feedback
3. Read the problem carefully. There are some differences in how the material additions are accounted for.
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) | Work in Process-Assembly | ||
Materials Inventory | |||
(b) | Work in Process-Assembly | ||
Conversion Costs-Control | |||
(c) | Finished Goods | ||
Work in Process-Assembly |
Please, I need help with parts 3, c, d, and e. Thank you!
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