Muskoge Company uses a process-costing system. The company manufactures a produc
ID: 2515381 • Letter: M
Question
Muskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the processes. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February:
Molding
Assembly
Beginning Inventories:
Physical Units
10,000
8,000
Costs:
Transferred in
--
$ 45,200
Direct Materials
$ 22,000
--
Conversion Costs
$ 13,800
$ 16,800
Current Production:
Units Started
25,000
?
Units Transferred Out
30,000
35,000
Costs:
Transferred in
--
?
Direct Materials
$ 56,250
$ 39,550
Conversion Costs
$ 103,500
$ 136,500
Percentage of Completion:
Beginning Inventory
40%
50%
Ending Inventory
80
50
Required:
Using the FIFO method prepare the following for the Molding Department:
a) A physical flow schedule
b) An equivalent units calculation
c) Calculation of unit costs. Round to four decimal places
d) Costs of ending work in process and cost of goods transferred out
e) A cost reconciliation
Molding
Assembly
Beginning Inventories:
Physical Units
10,000
8,000
Costs:
Transferred in
--
$ 45,200
Direct Materials
$ 22,000
--
Conversion Costs
$ 13,800
$ 16,800
Current Production:
Units Started
25,000
?
Units Transferred Out
30,000
35,000
Costs:
Transferred in
--
?
Direct Materials
$ 56,250
$ 39,550
Conversion Costs
$ 103,500
$ 136,500
Percentage of Completion:
Beginning Inventory
40%
50%
Ending Inventory
80
50
Explanation / Answer
a) A physical flow schedule
Muskoge Company
Molding Department
A Physical Flow Schedule
Working
b) An equivalent units calculation
c) Calculation of unit costs
Cost per Equivalent Unit = Current Costs added this period / Total Equivalent Units
Unit Cost = Unit direct materials cost + Unit conversion costs
= $56,250 / 25,000 + $103,500 / 30,000
= $2.25+$3.45
= $5.70
d) Costs of ending work in process and cost of goods transferred out
and
e) cost Recociliation
Costs in ending work in process
e)
Muskoge Company
Molding Department
A Physical Flow Schedule
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