Paper Instructions

MANAGERIAL ACCOUNTING

SVSU

Winter 2021

Process Costing – FIFO Assumptions

The Stones Company had unfinished units in both of its manufacturing operations.  Production and cost data for the prior month is provided for Department A below:

  Department A  Beginning of Month  End of Month
  Beginning units  Percentage completion:        Direct material        Direct labor and overhead  20,000   100% 75%  15,000   100% 60%
  Beginning Costs  $ 180,000   
  Inputs for Month — Department A
  Units introduced          75,000 (units)
  Cost introduced:         Direct material         Direct labor and overhead       $ 510,000    $ 177,600

Production and cost data for Department B is provided below:

  Inputs for Month–Department B
  Department B  Beginning of Month  End of Month
  Beginning units  Percentage completion:  Direct material            Direct labor / overhead  8,000   100% 25%  10,000   100% 30%
  Beginning costs  $112,000   
     Units introduced     ?
     Cost introduced:   
             Transferred-in    ?
              Direct material      $ 96,000
              Direct labor & overhead     $197,500

ANSWER SHEET

Managerial Accounting – 214

SVSU

Name________________________

  A. Required:      Complete the following sequence of steps for Department A.
  1.  Compute physical flow and equivalent full units (use back of page if necessary).
  2.  Compute unit costs.
  3. Determine ending work-in-process for Department A.
  4. Prepare the journal entry to transfer costs to Department B.              

   Work-In-Process – Dept. A                                          Work  in Process – Dept. B          

Beg. WIP      180,000                                                                         Beg. WIP           112,000                                                    

DM               510,000       ………….    (?)                                    TI …………………….  (?)

DL & OH     177,600       (transferred out)                                     DM                       96,000          ……………………(?)                              867,600                                                                 DL &OH           197,500                                                                                                                                                                                                                                        (Transferred to F/G)                                                                                                                          …………………………….  (?)   

End. WIP ……………(?)                                                                         End WIP  ………………..   (?)

ANSWER SHEET

Managerial Accounting – 214

SVSU

Name_______________

  B. Required:  Complete the following sequence of steps for Department B.
  1.  Compute physical flow and equivalent full units (use back of page if necessary).
  2.  Compute unit costs.
  3. Determine the ending work-in-process for Department B.  
  4. Prepare the journal entry to transfer costs to Finished Good.          

           Work-In-Process – Dept. B                                          Finished Goods          

   Beg. WIP     112,000                                                                          Beg. F/G          N/A                                        

   TI             …………..                                                              

    DM               96,000          …. ………..    (?)                                 ……………………    (?)                                                        

   DL&OH      197,500            (transferred to F/G)                (transferred from Dept. B)                                                

                 …………..                                                                                                                             

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