Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 3

FIFO Method; Two Departments Bhatti Company produces plastic photo frames. Two departments ,molding and finishing, are involved in the manufacturing. The molding department fills the molds with hot liquid plastic that is left to cool and then opens them. The finishing department removes the plastic frame from the mold and strips the edges of the frames of extra plastic. The following information is available for the month of January:

The work-in-process inventory in the finishing department is estimated to be 40% complete for conversion both at the beginning and end of January. Costs of production for January follow:

The molding department started 50,000 pounds of product in January. The firm uses the FIFO method of process costing.
Required Prepare a report for both the molding and finishing departments for the month of January. The report should include equivalent units of production (in pounds), total manufacturing costs, cost per equivalent unit (pounds), cost of ending work-in-process inventory, and cost of goods completed and transferred out.