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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Transferred-In Cost

Powers Inc. produces a protein drink. The product is sold by the gallon. The company has two departments: mixing and bottling. For August, the bottling department had 70,000 gallons in beginning inventory (with transferred-in costs of $283,000) and completed 262,500 gallons during the month. Further, the mixing department completed and transferred out 240,000 gallons at a cost of $957,000 in August.

Required:

  1. 1. Prepare a physical flow schedule for the bottling department.
  2. 2. Calculate equivalent units for the transferred-in category.
  3. 3. Calculate the unit cost for the transferred-in category.

1.

To determine

Make a physical flow schedule for the bottling department.

Explanation

Physical Flow Schedule:

The schedule which is made with the objective to determine the production of physical units is known as physical flow schedule. It considers all units in process which can be related to any completion stage.

Prepare physical flow schedule of Company PI:

Physical Flow Schedule
Units accounted For:Units(gallons)
Units in BWIP70,000
Units started ...

2.

To determine

Compute the equivalent units for the transferred-in category.

3.

To determine

Compute the unit cost for the transferred-in category.

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