Problem 6-46 FIFO Method; Two Departments [LO 6-2, 6-5, 6-6]

Bhatti Company produces plastic photo frames. Two departments, molding and finishing, are involved in the manufacturing. The molding department fills the molds with hot liquid plastic that is left to cool and then opens them. The finishing department removes the plastic frame from the mold and strips the edges of the frames of extra plastic.

The following information is available for the month of January:

Work-in-Process Inventory	January 1			January 31
	Quantity (pounds)	Cost		Quantity (pounds)	Cost
Molding department	None			None
Finishing department	5,000	$17,500		2,000	?

The WIP Inventory in the finishing department is estimated to be 40% complete for conversion both at the beginning and end of January. Costs of production for January follow:

Costs of Production	Direct Materials	Conversion
Molding department	$500,000	$115,000
Finishing department		119,140

The molding department started 50,000 pounds of product in January. The firm uses the FIFO method of process costing.

Required

1. Prepare a production cost report for the molding department.

2. Prepare a production cost report for the finishing department.

Production Information Molding Department Physical Units FIFO Equivalent Units Direct Conversion Materials Completion Percentage [ 100% 50,000 50,000 Input: Beginning WIP Direct materials Conversion Units started (lbs) Total to account for Output: Units finished or trans-out (lbs) Ending WIP Direct materials Conversion Total accounted for (lbs) Total equivalent units 50,000 50,000 50,000 100% 40% 50,000 50,000 50,000 Units Cost Determination Direct Conversion Total Material Beginning WIP Current costs Total Divide by equivalent units FIFO Cost per EU 615,000 615,000 $ 500,000 $ 500,000 50,000 $ 10.00 $ $ $ 115,000 115,000 50,000 2.30 $ 12.30 Units Cost Determination Direct Conversion Total Material Beginning WIP Current costs Total Divide by equivalent units FIFO Cost per EU 615,000 615,000 $ 500,000 $ 500,000 50,000 $ 10.00 $ $ $ 115,000 115,000 50,000 2.30 $ 12.30 Cost Assignment Units Units in Completed and Ending WIP Transferred Out Inventory Total Finished goods Prior period costs in Beginning WIP Current period cost to complete Beg WIP Cost of units started and finished Total Ending WIP Direct materials Conversion Total manufacturing costs accounted for 0 $ Production Information Molding Department Physical Units FIFO Equivalent Units Direct Conversion Materials Completion Percentage [ 100% 50,000 50,000 Input: Beginning WIP Direct materials Conversion Units started (lbs) Total to account for Output: Units finished or trans-out (lbs) Ending WIP Direct materials Conversion Total accounted for (lbs) Total equivalent units 50,000 50,000 50,000 100% 40% 50,000 50,000 50,000 Units Cost Determination Direct Conversion Total Material Beginning WIP Current costs Total Divide by equivalent units FIFO Cost per EU 615,000 615,000 $ 500,000 $ 500,000 50,000 $ 10.00 $ $ $ 115,000 115,000 50,000 2.30 $ 12.30 Units Cost Determination Direct Conversion Total Material Beginning WIP Current costs Total Divide by equivalent units FIFO Cost per EU 615,000 615,000 $ 500,000 $ 500,000 50,000 $ 10.00 $ $ $ 115,000 115,000 50,000 2.30 $ 12.30 Cost Assignment Units Units in Completed and Ending WIP Transferred Out Inventory Total Finished goods Prior period costs in Beginning WIP Current period cost to complete Beg WIP Cost of units started and finished Total Ending WIP Direct materials Conversion Total manufacturing costs accounted for 0 $