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Tokyo manufacturing company produce a product in two
manufacturing department Moulding and finishing department. The Enter question
product is moulded out of plastic in the Moulding Department and
then transferred to finishing department, where parts are
added to
the moulded plastic unit. Because only one product is manufactured
by the company, a process cost system is used
with FIFO cost
assumption.
Data related to August operation in the moulding department
are: Beginning inventory
Added this period Continue to post
39,980 12638 18,779
2 questions remaining
Costs are charge to department: Material
Labour
Factory overhead
4120 522 961
During the period 9200 units were transferred from the
moulding department to the finishing department. The moulding My Textbook Solutions
department had 1000 unit still in the process in at the end of the
july; they were 100% as to material and 40% complete as to
conversion cost. The moulding department had 800 units still in
process at the end of the August; they were 75% complete as to
material and 25% complete as to conversion cost.
Required:
Please justify how the changes from average cost method to
FIFO method can affect the cost of production report.
Heat And... Fundament... Financial...
Expert Answer
4th Edition 3rd Edition 10th Edition
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NEha JAju answered this
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5,339 answers
FIFO- Cost production report
Moulding Department
Direct
Physical Material Direct
Flow Of Units Units A Labor Over
Units to be accounted for
Beginning work in process
inventory 1000
Units started 9000
Total u nits to be accounted
for 10000
Completed and transferred
out
From Beginning Inventory in
Process 1000
Units started and completed this
period 8200
transferred 100000
Ending work in progress
inventory© 800
Total units to be accounted for
(f) 100800
Calculation of equivalent
units
Units in Beginning WIP n 1000 1000 1000
% of completion of Beginning WIP in
last period 100% 40% 40%
% of completion of Beginning WIP
completed in current period m 0% 60% 60%
Beginning WIP Equivalents A
(n*m) 1000 0 600 600
Units started and completed
B 8200 8200 8200 8200
transferred 9200 8200 8800 8800
Units of Ending
WIP 800 800 800 800
% completion 100% 75% 25% 25%
Ending Inventory in
process 800 600 200 200
Total units to assig cost 10000 8800 9000 9000
Cost per equivalent units
Direct
Material Direct
Total A labor Overhead
Step 3
Beginning Work in Process, 5603
Cost incurred during the
period $71,397 $39,980 $12,638 $18,779
Total cost accounted 77000 39980 12638 18779
Step 4
Cost per equivalent units
Cost during the
period $71,397 39980 12638 18779
divide by equivalent units 8800 9000 9000
Cost per equivalent units
d $8.03 $4.54 $1.40 $2.09
Assignment of cost
Work in Process, Beginning 5603
To complete Inventory in process
Beginning d*A $2,094 0 843 1252
Cost of completed Beginning,
Wip $7,697
Started and completed b*d $65,878 37254 $11,515 $17,110
Total cost of units completed and
Transferred 0ut $73,576
Work in process Ending c*d $3,424 2726 $281 $417
Total cost assigned 77000
Cost of Prduction report
(weighted avg method)
ProductionDepartment Equivalent Units
Physical Direct Conversion
Flow Of Units Units Direct material material Cost
Units to be accounted for
Beginning work in process
inventory 1000
Started in August 9000
Total u nits to be accounted
for 10000
Units accounnted for: 9200
Units transferred out (b) 9200 9200 9200 9200
Ending work in progress inventory c
(75%
material and 25% conversion) 800 600 200 200
Total units to be accounted for
(f) 10000 9800 9400 9400
Flow of Cost Total cost
Cost in the begnning work in progress
inventory 4120 522 961 5603
cost added to process $39,980 $12,638 $18,779 71397
Total Cost to be accounted for
(e) 44100 13160 19740 77000
Cost per equivalent unit
(a) 4.50 1.40 2.10 8
Cost accounted for
Cost assigned to units
transferred out (a*b) 41400 12880 19320 73600
Cost in ending work in
progress inventory
(a*c) 2700 280 420 3400
Total Cost accounted
for 44100 13160 19740 77000
The cost per equivalent unit as per
weighted average method is $8
The cost per equivalent unit as per
FIFO method is slightly high it is $8.03
So it is higher by $.03 per
unit
FIFO Weighted Decrease in COGS
Cost of goods completed and
transferred $73,576 73600 24
So the cost of good sold is lower
under FIFO method by $24
FIFO Weighted Increase
Ending Inventory $3,424 3400 24
ending Inventory is higher by $24 as
per FIFO
If any doubt please comment
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Questions viewed by other students
Q: Tokyo manufacturing company produce a product in two
manufacturing department Moulding and
finishing
department. The product is moulded out of plastic in the
Moulding Department and then
transferred to finishing
department, where parts are added to the
moulded plastic unit. Because only one
product is manufactured by the
company, a process cost system is
used with FIFO cost...
A: See answer 100% (1 rating)
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