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Question - Lotion Co. processes a single type of paint for commercial use. For the current period the following information is given:
Units
Material Costs
Conversion Costs
Beginning Work-in-Process (WIP)
13,000
$47,300
$49,400
Started During the Current Period
80,000
$520,000
$784,225
Ending Work-in-Process (WIP)
7,500
All materials are added at the beginning of the production process. The beginning WIP was 40% complete as to conversion, while the ending WIP was 30% completed for conversion purposes.
a. Calculate Lotion's physical flow of units, equivalent units, cost per equivalent unit and assign costs to Finished Goods and Ending Work-in-Process inventories using the Weighted Average method of process costing. Clearly indicate the costs assigned to inventory categories.
b. Calculate Lotion's physical flow of units, equivalent units, cost per equivalent unit and assign costs to Finished Goods and Ending Work-in-Process (WIP) inventories using the FIFO method of process costing. Clearly indicate the costs assigned to inventory categories.
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