First out (fifo) method, Prepare the production cost report

First out (fifo) method

Assignment Help Accounting Basics

Reference no: EM13912812

Gnomada Company manufactures garden gnomes (decorative lawn products) through two

production departments, Forming and Finishing. When processing is complete in the Forming

Department, the product is transferred to the Finishing Department. In the Finishing

Department, the product is sanded and painted. The paint (material) is added when the

process is 60% complete. Conversion costs are added evenly throughout the process. Data

for the Finishing Department for the month of October are given below:

Physical units for October:

Beginning work in process (October 1) 1,100 units

(Transferred in costs, ?%; paint materials, ?%; conversion costs, 70%)

Transferred in during October 10,300 units

Completed and transferred out during October 10,700 units

Ending work in process (October 31) ? units

(Transferred in costs, ?%; paint materials, ?%; conversion costs, 35%)

Costs for October: Beginning WIP Added in Oct.

Transferred in $ 7,650 $ 97,800

Paint materials 8,520 70,650

Conversion costs 5,630 131,850

Totals $21,800 $300,300

REQUIRED:

a. (1) Prepare the production cost report for the Finishing Department for October using the

first in, first out (FIFO) method. Costs per equivalent unit should be carried to four

decimals.

(2) Prepare the journal entry to transfer the cost of completed units out of production.

b. Repeat requirement (a) for the month of November. (HINT: BEGINNING INVENTORY

FOR NOVEMBER IS ENDING INVENTORY FOR OCTOBER (units, percentage of

completion, costs).) (If your spreadsheet is set up correctly, you should only need to

change some numbers in your input section.)

Physical units for November:

Beginning work in process (November 1) ? units

(Transferred in costs, ?%; paint materials, ?%; conversion costs, ?%)

Transferred in (started) during November 11,000 units

Completed and transferred out during October 10,500 units

Ending work in process (October 31) ? units

(Transferred in costs, ?%; paint materials, ?%; conversion costs, 75%)

Costs for November: Beginning WIP Added in Nov.

Transferred in $ ? $104,650

Paint materials ? 87,100

Conversion costs ? 145,700

Totals $ ? $337,450

(HINT: BEGINNING INVENTORY FOR NOVEMBER IS ENDING INVENTORY FOR

OCTOBER (units, percentage of completion, costs).)

c. Repeat requirements (a) and (b) using the weighted average method. Costs per

equivalent unit should be carried to four decimals.

Reference no: EM13912812

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