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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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Chapter 6, Problem 66P, Required: 1. Using the FIFO method, prepare the following for Department A: (a) a physical flow

Required:

  1. 1. Using the FIFO method, prepare the following for Department A: (a) a physical flow schedule, (b) an equivalent unit calculation, (c) calculation of unit costs (Note: Round to three decimal places.), (d) cost of EWIP and cost of goods transferred out, and (e) a cost reconciliation.
  2. 2. CONCEPTUAL CONNECTION Prepare journal entries that show the flow of manufacturing costs for Department A. Use a conversion cost control account for conversion costs. Many firms are now combining direct labor and overhead costs into one category. They are not tracking direct labor separately. Offer some reasons for this practice.

1.

a.

To determine

Make a physical flow schedule for department A using FIFO method.

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 J:

Physical Flow Schedule
Units to account for:Units
Units in BWIP5,000
Add: Units s...

b.

To determine

Compute equivalent unit of production with help of equivalent unit schedule of Company J.

c.

To determine

Compute unit cost of Department A.

d.

To determine

Compute total cost of goods transferred out and cost of EWIP.

e.

To determine

Make cost reconciliation for Department A.

2.

To determine

Journalize the transactions that show the flow of manufacturing costs for department A. State the reasons for firms combining direct labor and overhead costs into one category.

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