Problem *

Using the FIFO costing method, prepare a process cost report for the mixing Department for January. Explain how the analysis for the Cooking Department will differ from the analysis for the Mixing Department. Honey Dews Company produces organic honey, which it sells to health food stores and restaurants. The company owns thousands of beehives. No direct materials other than honey are used. The production operation is a simple one. Impure honey is added at the beginning of the process and flows through a series of filtering, leading to a pure finished product. Costs of labor and overhead are incurred uniformly throughout the filtering process. Production data for April and May are as follows: The beginning work in process inventory for April was 80 percent complete for conversion costs, and ending work in process inventory was 20 percent complete. The ending work in process inventory for May was 30 percent complete for conversion costs. Assume that there was no loss from spoilage or evaporation. Using the FIFO method, prepare a process cost report for April. From the information in the process cost report, identify the amount that should be transferred out of the Work in Process Inventory account, and state where those dollars should be transferred. Repeat requirements 1 and 2 for May. Carton Corporation produces a line of beverage cartons. The production process has been automated, so the product can now be produced in one operation rather than in the three operations that were needed before the company purchased the automated machinery. All direct materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process. Operating data for July and August are as follows