Transferred-In Cost Powers Inc. produces a protein drink. The product is sold by

Question

Transferred-In Cost

Powers Inc. produces a protein drink. The product is sold by the gallon. The company has two departments: Mixing and Bottling. For August, the bottling department had 64,400 gallons in beginning inventory (with transferred-in costs of $283,000) and completed 201,000 gallons during the month. Further, the mixing department completed and transferred out 246,000 gallons at a cost of $634,000 in August.

Required:

1. Prepare a physical flow schedule for the bottling department.

2. Calculate equivalent units for the transferred-in category.
equivalent units

3. Calculate the unit cost for the transferred-in category. If required, round your answer to the nearest cent.
$per unit

Powers Inc. Physical Flow Schedule - Bottling Department For the Month of August Physical flow schedule: Units in beginning work in process Units started during the period Total units to account for Units completed and transferred out: Units started and completed Units completed from beginning work in process Units in ending work in process Total units accounted for

Explanation / Answer

(1).

Powers Inc.

Physical Flow Schedule – Bottling Department

For the month of August

Physical flow schedule:

Units in beginning work in process

64400

Units started during the period

246000

Total units to account for

310400

Units completed and transferred out:

Units started and completed

136600

Units completed from beginning work in process

64400

201000

Units in ending work in process

109400

Total units accounted for

310400

(2).

Equivalent units for the transferred-in category = 310400 (It is calculated in above table)

(3). Unit cost for the transferred-in category = 2.95 per unit OR $3 per unit (Approx.)

Explanation;

Total cost ($283000 + $634000) = $917000

Equivalent units = 310400

So, Unit cost for the transferred-in category ($917000 / 310400) = $2.95 per unit or $3 (Approx.)

Powers Inc.

Physical Flow Schedule – Bottling Department

For the month of August

Physical flow schedule:

Units in beginning work in process

64400

Units started during the period

246000

Total units to account for

310400

Units completed and transferred out:

Units started and completed

136600

Units completed from beginning work in process

64400

201000

Units in ending work in process

109400

Total units accounted for

310400

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