FIFO Method, Two-Department AnalysisMuskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February: Molding AssemblyBeginning inventories: Physical units 10,000 8,000 Costs: Transferred in — $45,300 Direct materials $22,000 — Conversion costs $13,800 $16,900 Current production: Units started 25,000 ? Units transferred out 30,000 35,000 Costs: Transferred in — ? Direct materials $56,250 $40,250 Conversion costs $103,500 $143,000 Percentage of completion: Beginning inventory 40% 50% Ending inventory 80 50 Required: d. Cost of ending work in process and cost of goods transferred out.Cost of ending work in process: $Cost of goods transferred out: $e. A cost reconciliation.Costs to account for:Beginning work in processCosts incurredTotal costs to account forCosts accounted for:Transferred outEnding work in processTotal costs accounted for2. Prepare journal entries that show the flow of manufacturing costs for the Molding Department. (a) Materials are added at thebeginning of the process, (b) conversion costs are recorded, and (c) units are transferred to the Assembly Department.(a)(b)(c)

Journal entries refer to the systematic documentation do the financial transactions of a company in…

Answered: Molding and Assembly. In the Molding…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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FIFO Method, Two-Department Analysis

Muskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February:

	Molding	Assembly
Beginning inventories:
Physical units	10,000	8,000
Costs:
Transferred in	—	$45,300
Direct materials	$22,000	—
Conversion costs	$13,800	$16,900
Current production:
Units started	25,000	?
Units transferred out	30,000	35,000
Costs:
Transferred in	—	?
Direct materials	$56,250	$40,250
Conversion costs	$103,500	$143,000
Percentage of completion:
Beginning inventory	40%	50%
Ending inventory	80	50