Road Signs assembles products from component parts. It has two departments that process all products. During January, the beginning work in process in the assembly department was half complete as to conversion and complete as to direct materials. The beginning inventory included $12,000 for materials and $4,000 for conversion costs for the Assembly Department. The Finishing Department had a beginning inventory of $33,000 for transferred-in and $8,000 for Conversion costs. Beginning inventory was 25 % complete for the Assembly Department and 30% for Finishing. Direct materials are added at the beginning for assembly and at the end for finishing. Ending work-in-process inventory in the assembly department was 40% complete and 55% for Finishing. All spoilage is considered normal and is detected at the end of the process.

Assembly Finishing

Beginning work-in-process units 20,000 24,000

Beginning Inventory Completion (conversion) 25% 30%

Units started this period 40,000 ?

Good Units transferred this period 46,000 54,000

Normal Spoilage 10% 8%

Ending work-in-process units 8,000 6,000

Ending inventory Completion (conversion) 40% 55%

Material costs added $44,000 $28,000

Conversion costs added $16,000 $24,000

A cost of production report using the FIFO method was done. If you had prepared the report using the weighted average method"

a. How are the two different?

b. Which would you recommend

c. In this specific case, which would you recommend and why?