Project Part II Section I
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

Because of the availability of equipment and labor, Clear View has started making mass market picture frames at its Orlando, Florida plant with the excess capacity. Clear View has determined that process costing would be most appropriate for this product. Management wants to know the differences 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 costs). Direct materials are added when the assembly department process is 10% complete. Conversion costs are added evenly during the assembly department's process.

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

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 View's managers choose the weighted-average method or the FIFO method? Explain briefly.