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
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 10P: Mt. Palomar Manufacturing Co. uses a process cost system. Its manufacturing operation is carried on...
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Total costs transferred to the Storeroom
Transcribed Image Text: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 ar
then transferred to Department 2 where all the incremental materials needed for its completion are added after fina
inspection. In Department 1, units are inspected at the 100% stage of production while in Department 2, inspection
takes place when the units are 90% completed. Department 1 uses FIF0 costing while Department 2 uses th
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
1/5
4/5
12,000
7,000
1/3
2/7
60,000
(4% of units started in process)
_(25% of normal spoilage)
1,000
500
P .
P 456,720
P 343,800
P 449,160
Materials
P 216,000
Conversion costs
P 156,000
Current costs:
P -
P3,168,000
P4,942,080
P 2
P1,344,000
Transferred in
Materials
Conversion costs
P2,052,000
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