Question:
PHYSICAL FLOW, EQUIVALENT UNITS Payson Company produces a product that passes through two departments: mixing and cooking. Both departments use the weighted average method. In the mixing department, all direct materials are added at the beginning of the process. All other manufacturing inputs are added uniformly. The following information pertains to the mixing department for February:
a. Beginning work in process (BWIP), February 1: 100,000 pounds, 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. The costs assigned to this work are as follows:
|
Direct materials
|
$20,000
|
|
Direct labor
|
10,000
|
|
Overhead
|
30,000
|
b. Ending work in process (EWIP), February 28: 50,000 pounds, 100 percent complete with respect to direct materials and 60 percent complete with respect to conversion costs.
c. Units completed and transferred out: 370,000 pounds. The following costs were added during the month:
|
Direct materials
|
$211,000
|
|
Direct labor
|
100,000
|
|
Overhead
|
270,000
|
Required:
1. Prepare a physical flow schedule.
2. Prepare a schedule of equivalent units.
3. Compute the cost per equivalent unit.
4. Compute the cost of goods transferred out and the cost of ending work in process.
5. Prepare a cost reconciliation.
6. Repeat Requirements 2-4 using the FIFO method.