Process Costing
Now suppose that Springville Company uses the FIFO method for inventory valuations. Springville produces a product that passes through two departments: Blending and Cooking. In the blending department, all materials are added at the beginning of the process. All other manufacturing inputs are added uniformly. The following information pertains to the blending department for February:
a. BWIP, February 1: 100,000 pounds, 40 percent complete with respect to conver- sion costs. The costs assigned to this work are as follows:
|
Materials
|
$20,000
|
|
Labor
|
10,000
|
|
Overhead
|
30,000
|
b. EWIP, February 28: 50,000 pounds, 60 percent complete with respect to conver- sion costs.
c. Units completed and transferred out: 370,000 pounds. The following costs were added during the month:
|
Materials
|
$211,000
|
|
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 EWIP.