Chapter 8 Process Costing WIP inventory-Department T Beginning inventory (15,000
ID: 2567344 • Letter: C
Question
Chapter 8 Process Costing WIP inventory-Department T Beginning inventory (15,000 units, 60% complete with respect to Department T costs) . .. Department T conversion costs. .. Current work (35,000 units started) 53,150 Prior department costs.... . 280,000 209,050 The ending inventory has 5,000 units, which are 20 percent com- plete with respect to Department T costs and 100 percent com- plete for prior department costs. Required Prepare a production cost report using FIFO. 8-40. Prepare a Production Cost Report: Weighted-Average Method (LO 8-2, 3, Refer to the information in Exercise 8-39. Required a. Prepare a production cost report using the weighted-average method h Is the ending inventory higher using FIFO or the weighted-average method? Why? Would you recommend that Lansing use the FIFO method or the weighted-average method? Explain. (LO 8-2,4Explanation / Answer
PRODUCTION COST REPORT (WEIGHTED AVERAGE) Physical units Equivalent units Prior Department Department T Flow of units: Units to be accounted for: Beginning WIP inventory 15000 Units started this period 35000 Total units to account for 50000 Units accounted for: Completed and transferred out 45000 45000 45000 Units in ending inventory 5000 Prior department 5000 Department T 1000 Total units accounted for 50000 50000 46000 Flow of costs: Total Prior Department Department T Costs to be accounted for: Costs in beginning WIP inventory $ 169,150 $ 116,000 $ 53,150 Current period costs $ 489,050 $ 280,000 $ 209,050 Total costs to be accounted for $ 658,200 $ 396,000 $ 262,200 Cost per equivalent unit Prior department $ 7.92 Department T $ 5.70 Costs accounted for: $ 612,900 $ 356,400 $ 256,500 Units completed and transferred out $ 45,300 $ 39,600 $ 5,700 Total costs accounted for $ 658,200 $ 396,000 $ 262,200