Question

Chapter 6 rocess Costing 59. LO.3 & LO.4 (FIFOi second department) Use the information for Octavia Corp. in Problem 57, except assume that the company uses FIFO costing. Prepare, in good form, a FIFO cost of production report for the Curing Department for May 2013. CPA ADAPTED 60. LO.3 & LO.4 (Comprehensive; FIFO; two departments) Keepln makes fencing in a two-stage production system. In the Curting Department, wood is cut and assembled into 6-foot fence sections In the Coating Department, the sections are pressure- treated to resist the effects of weather and then coated with a preservative. The follow- ing production and cost data are available for March 2013 (units are 6-foot fence sections): Units Cutting Dept. 1,300 Coating Dept. Beginning WIP Inventory (March 1) Complete as to matenial 80% 75% 0% Complete as to conversion Units started in March Units completed in March Ending WIP Inventory (March 31) 4,800 4,500 1,100 Complete as to material Complete as to conversion 0% 40% 20% Costs Beginning WIP Inventory N/A s 8,345 7,720 $11,840 Material 1,674 Transferred in Material N/A 35,200 21,225 4,950 11,300 a. Prepare EUP schedules for both the Cutting and Coating Departments. b. Determine the cost per EUP for the Cutting Department. c. Assign costs to goods transferred out of and in ending WIP Inventory in the Cutting d. Determine the cost per EUP in the Coating Department. Use the modified FIFO basis and round to the nearest cent. (See footnote 7, page 205.) e. Assign costs to goods transferred out of and in ending WIP Inventory in the Coat- ing Department. 61. LO.5 (Multiproduct; hybrid costing) Be-at-Ease Industries manufactures a series of arms), three models of molded plastic chairs: standard (without arms), deluxe (with and executive (with arms and padding). All are variations of the same design. The com- pany uses batch manufacturing and has a hybrid costing system. and finish the chairs. Plastic sheets which are sold directly to other remaining plastic sheets are mold dard model is sold after this opera to the deluxe and executive models Be-at-Ease has an extrusion operation and subsequent operations to form, trim, d by the extrusion operation, some of During the forming operation, the eats, and the legs are added; the stan- the trim operation, the arms are added

Answer 1

SOLUTION-60)

PART-A)

	Units	Tfd-in	Material	Conversion
Opening WIP Inventory	900	900	900	360
Started and completed	4,500	4,500	4,500	4,500
Closing WIP Inventory	500	500		200
Equivalent units of production	5,900	5,900	5,400	5,060

PART-B)

	Total	Material	Conversion
Opening WIP Inventory	16,065
Current Costs	56,425	35,200	21,225
Total costs accounted	72,490
Equivalent units of production	6,100	4,400	4,245
Cost per equivalent units of production	12	8	5

PART-C)

	Amount-in	Amount-out
Opening WIP Inventory		16,065
Transferred In	2,080
Material	1,625
Spoilage	43,969	47,674
Total cost of good transferred		63,739
Direct Material	3,520
Converstion Cost	1,100	4,620
Total cost accounted		68,359

PART-D)

	Total	Tfd in	Material
Total cost of good transferred	13,514
Current Costs	79,989	63,739	4,950
Total costs accounted	93,503
Equivalent units of production	5,900	5,900	5,400
Cost per equivalent units of production	15.85	10.8	0.92

PART-E)

	Amount in	Amount out
Transferred Out
Opening WIP Inventory	13,514
Material	825
Conversion	804	15,143
Spoilage		71,316
Total cost of good tfd		86,459
Transferred In	5,402
Conversion Cost	447	5,848
Total cost accounted		92,307