What is the total costs transferred to Department 2?What is the total costs transferred to the Storeroom? 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 arthen transferred to Department 2 where all the incremental materials needed for its completion are added after finainspection. In Department 1, units are inspected at the 100% stage of production while in Department 2, inspectiontakes place when the units are 90% completed. Department 1 uses FIF0 costing while Department 2 uses thweighted average costing.The production data for the month of February show the following:Department 1Department 2UNITSUnits in process, February 1, 2014Work completedUnits in process, February 28Work to be completedStarted in process during FebruaryNormal spoilageAbnormal spoilageWork in Process, February 1:Transferred in4,0004/58,0001/512,0007,0002/71/360,000(4% of units started in process)_(25% of normal spoilage)1,000500P .P 456,720P 343,800P 449,160MaterialsP 216,000Conversion costsP 156,000Current costs:P -P3,168,000P4,942,080Transferred inP 2MaterialsP1,344,000Conversion costsP2,052,000

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Description: What is the total costs transferred to Department 2?What is the total costs transferred to the Storeroom? Nico Manufacturing Company applies process costing in the manufacture of its best-seller product, "brilliant"Manufacturing starts in Department

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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 an 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, inspectio takes place when the units are 90% completed. Department 1 uses FIFO costing while Department 2 uses th weighted average costing. The production data for the month of February show the following: Department 1 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 Materials Conversion costs Current costs: Transferred in Materials Conversion costs 8,000 1/5 12,000 1/3 60,000 (4% of units started in process) (25% of normal spoilage) P. P 216,000 P 156,000 P- P3,168,000 P4,942,080 Department 2 4,000 4/5 7,000 2/7 1,000 500 P 456,720 P 343,800 P 449,160 P2 P1,344,000 P2,052,000

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 an 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, inspectio takes place when the units are 90% completed. Department 1 uses FIFO costing while Department 2 uses th weighted average costing. The production data for the month of February show the following: Department 1 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 Materials Conversion costs Current costs: Transferred in Materials Conversion costs 8,000 1/5 12,000 1/3 60,000 (4% of units started in process) (25% of normal spoilage) P. P 216,000 P 156,000 P- P3,168,000 P4,942,080 Department 2 4,000 4/5 7,000 2/7 1,000 500 P 456,720 P 343,800 P 449,160 P2 P1,344,000 P2,052,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter6: Process Costing

Section: Chapter Questions

Problem 38P: Healthway uses a process-costing system to compute the unit costs of the minerals that it produces....

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Benson Pharmaceuticals uses a process-costing system to compute the unit costs of the over-the-counter cold remedies that it produces. It has three departments: mixing, encapsulating, and bottling. In mixing, the ingredients for the cold capsules are measured, sifted, and blended (with materials assumed to be uniformly added throughout the process). The mix is transferred out in gallon containers. The encapsulating department takes the powdered mix and places it in capsules (which are necessarily added at the beginning of the process). One gallon of powdered mix converts into 1,500 capsules. After the capsules are filled and polished, they are transferred to bottling, where they are placed in bottles that are then affixed with a safety seal, lid, and label. Each bottle receives 50 capsules. During March, the following results are available for the first two departments: Overhead in both departments is applied as a percentage of direct labor costs. In the mixing department, overhead is 200% of direct labor. In the encapsulating department, the overhead rate is 150% of direct labor. Required: 1. Prepare a production report for the mixing department using the weighted average method. Follow the five steps outlined in the chapter. (Note: Round to two decimal places for the unit cost.) 2. Prepare a production report for the encapsulating department using the weighted average method. Follow the five steps outlined in the chapter. (Note: Round to four decimal places for the unit cost.) 3. CONCEPTUAL CONNECTION Explain why the weighted average method is easier to use than FIFO. Explain when weighted average will give about the same results as FIFO.
SENYORA Manufacturing Company applies process costing in the manufacture of its sole product, "SLIMMERS™ Manufacturing starts in Department 1 where materials are all added at the start of processing. The good units are then transferred to Department 2 where all the incremental materials needed for its completion are added after final inspection. o In Department 1. units are inspected at the end of processing while in Department 2. inspection takes place when the units are 90% completed. o Department 1 uses FIFO costing while Department 2 uses the weighted average costing The production data for the month of August show the following Department 1 UNITS Department 2 Beginning work in process, August 1 Work to be done Ending work in process, August 31 Work completed Started in process during August Normal spoilage Abnormal spoilage COST Work in Process, August 1: Transferred in Materials Conversion costs Current costs: Transferred in Materials Conversion costs 20,000 80% 30,000 2/3…
Glenda Manufacturing Company applies process costing in the manufacture of its sole product, "Pharmanex"Manufacturing starts in Department 1 where materials are all added at the start of processing. The good units are then transferred to Department 2 where all the incremental materials needed for its completion are added after final inspection.In Department 1. units are inspected at the end of processing while in Department 2, inspection takes place when the units are 90% completed.Department 1 uses FIFO costing while Department 2 uses the weighted average costing.The production data for the month of August show the following: Department 1Department 2 UNITS Beginning work in process, August 120,00010,000 Work to be done80%20% Ending work in process, August 3130,00017,500 Work completed2/75/7 Started in process during August150,000 Normal spoilage(4% of units started in process)2,500 Abnormal spoilage(1/4 of normal spoilage)1,250 COST Work in Process, August 1: Transferred…
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Muskoge Company uses a process-costing system. The company manufactures a product that isprocessed in two departments: Molding and Assembly. In the Molding Department, directmaterials are added at the beginning of the process; in the Assembly Department, additionaldirect materials are added at the end of the process. In both departments, conversion costs areincurred uniformly throughout the process. As work is completed, it is transferred out. Thefollowing table summarizes the production activity and costs for February: Molding AssemblyBeginning inventories: Physical units 10,000 8,000 Costs: Transferred in — $ 45,400 Direct materials $22,000 — Conversion costs $13,800 $ 16,700Current production: Units started 25,000 ? Units transferred out 30,000 35,000 Costs: Transferred in — ? Direct materials $ 56,250 $ 40,250 Conversion costs $103,500 $142,845 Percentage of completion: Beginning inventory 40% 55% Ending inventory 80 50Required:3. Using the FIFO method, prepare the following for…
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