FIFO Method, Equivalent Units, Unit Cost, Multiple Departments Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments. The second department (Polishing) had the following physical flow schedule for December: Units to account for: Units, beginning work in process 4,000 (40% complete) Units started ? Total units to account for ? Units accounted for: Units, ending work in process 8,000 (50% complete) Units completed ? Units accounted for ? Costs in beginning work in process for the Polishing Department were direct materials, $5,000; conversion costs, $6,000; and transferred in, $8,000. Costs added during the month: direct materials, $32,000; conversion costs, $50,000; and transferred in, $40,000. Assume the company uses the FIFO method. Required: 1-a. Prepare a schedule of equivalent units. Enter percentages as whole numbers. Fordman Company Schedule of Equivalent Units For the month of December Direct Materials Conversion Costs Transferred In fill in the blank 92594405c073f88_2 fill in the blank 92594405c073f88_3 fill in the blank 92594405c073f88_4 Units to complete in BWIP: fill in the blank 92594405c073f88_5 x fill in the blank 92594405c073f88_6 % fill in the blank 92594405c073f88_7 fill in the blank 92594405c073f88_8 Units in EWIP: fill in the blank 92594405c073f88_9 x fill in the blank 92594405c073f88_10 % fill in the blank 92594405c073f88_11 fill in the blank 92594405c073f88_12 x fill in the blank 92594405c073f88_13 % fill in the blank 92594405c073f88_14 fill in the blank 92594405c073f88_15 fill in the blank 92594405c073f88_17 fill in the blank 92594405c073f88_18 fill in the blank 92594405c073f88_19 1-b. Compute the unit cost for the month of December. Round intermediate calculations and your final answer to the nearest cent. $fill in the blank 1810e3035f9506c_1 per equivalent unit
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
FIFO Method, Equivalent Units, Unit Cost, Multiple Departments
Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments.
The second department (Polishing) had the following physical flow schedule for December:
| Units to account for: | ||
| Units, beginning work in process | 4,000 | (40% complete) |
| Units started | ? | |
| Total units to account for | ? | |
| Units accounted for: | ||
| Units, ending work in process | 8,000 | (50% complete) |
| Units completed | ? | |
| Units accounted for | ? |
Costs in beginning work in process for the Polishing Department were direct materials, $5,000; conversion costs, $6,000; and transferred in, $8,000. Costs added during the month: direct materials, $32,000; conversion costs, $50,000; and transferred in, $40,000.
Assume the company uses the FIFO method.
Required:
1-a. Prepare a schedule of equivalent units. Enter percentages as whole numbers.
Schedule of Equivalent Units
For the month of December
| Direct Materials | Conversion Costs | Transferred In | |
| fill in the blank 92594405c073f88_2 | fill in the blank 92594405c073f88_3 | fill in the blank 92594405c073f88_4 | |
| Units to complete in BWIP: | |||
|
fill in the blank 92594405c073f88_5
x
fill in the blank 92594405c073f88_6
%
|
fill in the blank 92594405c073f88_7 | fill in the blank 92594405c073f88_8 | |
| Units in EWIP: | |||
|
fill in the blank 92594405c073f88_9
x
fill in the blank 92594405c073f88_10
%
|
fill in the blank 92594405c073f88_11 | ||
|
fill in the blank 92594405c073f88_12
x
fill in the blank 92594405c073f88_13
%
|
fill in the blank 92594405c073f88_14 | fill in the blank 92594405c073f88_15 | |
| fill in the blank 92594405c073f88_17 | fill in the blank 92594405c073f88_18 | fill in the blank 92594405c073f88_19 |
1-b. Compute the unit cost for the month of December. Round intermediate calculations and your final answer to the nearest cent.
$fill in the blank 1810e3035f9506c_1 per equivalent unit
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