Seacrest Company uses a process costing system. The company manufactures a product that is processed in two departments: A and B. As work is completed, it is transferred out. All inputs are added uniformly in Department A. The following summarizes the production activity and costs for November:

Required:

1. Using the FIFO method, prepare the following for Department A: (a) a physical flow schedule, (b) an equivalent unit calculation, (c) calculation of unit costs (round to two decimal places), (d) cost of EWIP and cost of goods transferred out, and (e) a cost reconciliation.

2. CONCEPTUAL CONNECTION: Prepare journal entries that show the flow of manufacturing costs for Department A. Use a conversion cost control account for conversion costs. Many firms are now combining direct labor and overhead costs into one category. They are not tracking direct labor separately. Offer some reasons for this practice.

CHART OF ACCOUNTS

Seacrest Company

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
130	Raw Materials
142	Work in Process-Department A
143	Work in Process-Department B
150	Overhead Control
160	Finished Goods
180	Accumulated Depreciation

	LIABILITIES
210	Accounts Payable
220	Wages Payable
230	Utilities Payable
240	Lease Payable
250	Other Payables

	EQUITY
310	Common Stock
320	Retained Earnings

	REVENUE
410	Sales

	EXPENSES
510	Cost of Goods Sold
520	Insurance Expense
530	Wages Expense
540	Supplies Expense
550	Utilities Expense
560	Depreciation Expense
590	Miscellaneous Expense
598	Conversion Costs-Department A
599	Conversion Costs-Department B

Refer to the list below for the exact wording of an amount description within your schedules.

Department A Department B Beginning inventories: Physical units 5,000 8,000 Costs: Transferred in $45,320 Direct materials Conversion costs $10,000 $6,900 $16,800 Current production: Units started 25,000 28,000 33,000 Units transferred out Costs: Transferred in Direct materials $57,800 $95,220 $37,950 $128.100 Conversion costs Percentage completion: Beginning inventory 40% 50% Ending inventory 80% 50% Amount Descriptions Beginning WIP From current period From prior period Goods in ending WIP Incurred during November Units started and completed