Question:Total costs transferred to the Storeroom Nico Manufacturing Company applies process costing in the manufacture of its best-seller product, "brilliant"Manufacturing starts in Department 1 where all materials are added at the start of the process. The good units arthen transferred to Department 2 where all the incremental materials needed for its completion are added after finainspection. In Department 1, units are inspected at the 100% stage of production while in Department 2, inspectiontakes place when the units are 90% completed. Department 1 uses FIF0 costing while Department 2 uses thweighted average costing.The production data for the month of February show the following:Department 1Department 2UNITSUnits in process, February 1, 2014Work completedUnits in process, February 28Work to be completedStarted in process during FebruaryNormal spoilageAbnormal spoilageWork in Process, February 1:Transferred in8,0004,0001/54/512,0007,0001/32/760,000(4% of units started in process)_(25% of normal spoilage)1,000500P .P 456,720P 343,800P 449,160MaterialsP 216,000Conversion costsP 156,000Current costs:P -P3,168,000P4,942,080P 2P1,344,000Transferred inMaterialsConversion costsP2,052,000

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Nico Manufacturing Company applies process costing in the manufacture of its best-seller product, "brillian Manufacturing starts in Department 1 where all materials are added at the start of the process. The good units a then transferred to Department 2 where all the incremental materials needed for its completion are added after fir inspection. In Department 1, units are inspected at the 100% stage of production while in Department 2, inspecti takes place when the units are 90% completed. Department 1 uses FIFO costing while Department 2 uses weighted average costing. The production data for the month of February show the following: Department 1 Department 2 UNITS Units in process, February 1, 2014 Work completed Units in process, February 28 Work to be completed Started in process during February Normal spoilage Abnormal spoilage Work in Process, February 1: Transferred in 8,000 4,000 4/5 7,000 2/7 1/5 12,000 1/3 60,000 (4% of units started in process) (25% of normal spoilage) 1,000 500 P - P 216,000 P 156,000 P 456,720 P 343,800 P 449,160 Materials Conversion costs Current costs: P - P3,168,000 P 2 Transferred in Materials P1,344,000 Conversion costs P4,942,080 P2,052,000

Nico Manufacturing Company applies process costing in the manufacture of its best-seller product, "brillian Manufacturing starts in Department 1 where all materials are added at the start of the process. The good units a then transferred to Department 2 where all the incremental materials needed for its completion are added after fir inspection. In Department 1, units are inspected at the 100% stage of production while in Department 2, inspecti takes place when the units are 90% completed. Department 1 uses FIFO costing while Department 2 uses weighted average costing. The production data for the month of February show the following: Department 1 Department 2 UNITS Units in process, February 1, 2014 Work completed Units in process, February 28 Work to be completed Started in process during February Normal spoilage Abnormal spoilage Work in Process, February 1: Transferred in 8,000 4,000 4/5 7,000 2/7 1/5 12,000 1/3 60,000 (4% of units started in process) (25% of normal spoilage) 1,000 500 P - P 216,000 P 156,000 P 456,720 P 343,800 P 449,160 Materials Conversion costs Current costs: P - P3,168,000 P 2 Transferred in Materials P1,344,000 Conversion costs P4,942,080 P2,052,000

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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