Muskoge Company uses a process-costing system. The company manufactures a produc

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 process. 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: Beginning inventories for Molding; Assembly (first number for molding second number for assembly) 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: 1. 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. Cost of ending work in process and cost of goods transferred out e. A cost reconciliation

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 10,000 Add: Units Started in Process 25,000 Total Units to account for: 35,000 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 10000 Units started and completed 20,000 Ending Work in Process 5,000 Total Units to be accounted for: 35,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 0% 0 40% 4,000 Units started and completed 100% 20,000 100% 20,000 Ending Work in Process 100% 5,000 80% 4,000 Total Equivalent units 25,000 28,000 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 56,250 103,500 Equivalent Units 25,000 28,000 Cost per Equivalent unit 2.25 3.696 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (10000 units) Equivalent unit Cost per EU Total Cost Beginning Cost 35800 Material 0 2.25 0 Conversion Cost 4,000 3.696 14784 Cost of units completed from Beg WIP 50584 Units started and Transferred out (20,000 units) Equivalent unit Cost per EU Total Cost Material 20,000 2.25 45000 Conversion Cost 20,000 3.696 73920 Total Cost of Units completed and transferred out: 118920 Ending Work in process (5,000 units) Equivalent unit Cost per EU Total Cost Material 5,000 2.25 11250 Conversison Cost 4,000 3.696 14784 Total cost of Ending Work in process: 26,050 Cost reconciliation: Cost to be accounted for: Cost of Beginning WIP 35800 Currnet manufacturing cost (56250+103500) 159750 Total cost to be accounted for 195550 Cost accounted for: Cost of units transferred out (50584+118920) 169504 Cost f Ending Wip 26050 Cost accounted for 195554

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