Managerial Accounting: The Corners...

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



Managerial Accounting: The Corners...

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

(Appendix 6A) First-In, First-Out Method

Refer to Problem 6-67.


Prepare a production report for the mixing and encapsulating departments using the FIFO method. (Note: Round the unit cost to four decimal places.) (Hint: For the second department, you must convert gallons to capsules.)

To determine

Make production report of Company BP by applying FIFO method.


Production Report:

The document comprises all the activities of process department related to manufacturing which occurs; in a particular period of time is called production report. It helps to identify the efficiency of process department.

Prepare production report of company M as shown below:

Company BP
Mixing Department
Production Report for March Month
FIFO Method

Unit Information

Physical Flow:
Units to accounts for:UnitsUnits to accounted for:Units
Units in BWIP10Unit started and completed130
Units started150From BWIP10
  Units in EWIP20
Total units to account for160Total units accounted for160
Equivalent Units 
Started and completed130
To complete BWIP (10 gallons×0.60)6
Units in EWIP (20 gallons×0.50)10
Total equivalent units146
Cost Information
Cost to account for:







Cost in BWIP2528461,098
Cost added by department3,63613,85417,490
Total cost to account for:3,88814,70018,588
Cost per equivalent unit  $119.7945
Costs to account for:Transferred out (In $)


(In $)


(In $)

Transferred out: 
Units started and completed (130 gallons×$119.45)15,573 15573
Units in BWIP:   
From prior period1,098 1,098
From current period (6 gallons×$119.7495)719 719
Goods in EWIP (10 units×$119.7495) 11981198
Total cost accounted for:17,3901,19818,588

Table (1)

Therefore, cost per equivalent unit, equivalent units and total cost are $119.7495, 146 gallons and $18,588 respectively

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