Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 43

FIFO Method Jenice Company uses FIFO process costing to account for the costs of its single product. Production begins in the fabrication department, where units of direct materials are molded into various connecting parts. After fabrication is complete, the units are transferred to the assembly department, which adds no material. After assembly is complete, the units are transferred to the packaging department, which packages units for shipment. After the units have been packaged, the final products are transferred to the shipping department. A partially completed production cost report for the month of May in the fabrication department follows:

JENICE COMPANY Fabrication Department—Production Cost Report For the Month of May
Quantity Schedule	Units
Units to be accounted for
Work-in-process inventory, May 1 (materials: 100 percent; conversion: 40 percent)	3,000
Started into production	?
Total units to be accounted for	?
Units accounted for as follows
Transferred to department Y
Units from the beginning inventory	?
Units started and completed this month	?
Work-in-process inventory, May 31 (materials: 100 percent; conversion: 60 percent)	4,000
Total units accounted for	?

Equivalent Units and Unit Costs	Materials	Conversion	Total
Cost added during May	$172,500	$224,900	?
Equivalent units	?	?
Unit Cost	?	?	?
Cost Assignment
Cost to be accounted for ?
Cost accounted for as follows: ?

The cost incurred in the fabrication department’s work-in-process inventory at May 1 is $13,800. The assembly department’s production cost report for the month of May shows that the number of transferred-in units is 68,000.

Required

1. Fill in the missing amounts in the quantity schedule and complete the equivalent units and costs.

2. Complete the cost assignment part of the production cost report.

Step 1 of 14

Weighted Average Method:

Weighted Average Method is a method to determine inventory unit number which in the production from the prior period and fresh units in the current period. It is appropriate only when there is no major in the manufacturing cost per unit in opening and closing inventories count.