Ewing Company Manufactures a Specialized Product

Question 174

Question 174

Essay

Ewing Company manufactures a specialized product.Department 2 adds new material to the units received from Department 1 at the end of process.A normal loss occurs early in processing.Production and cost data for Department 2 for the month of April are as follows:
$\begin{array}{l}\text { In productions record (in units): } \\\text { In process, April 1-75\% complete for processing cost }&4,000\\\text { Received from Department } 1 &20,000\\\text { Completed and transferred to finished goods }&16,000 \\\text { Lost in processing (normal) }&2,000 \\\text { In process, April } 30-2 / 3 \text { complete for process cost }&6,000\end{array}$

Work in process inventory, April 1:
Preceding department cost	$ 620
Processing cost	2,000          =2,620
Cost from preceding department in April	1,800
Material cost for April	4,800
Processing cost for April	10,200

Required:Determine the following for Department 2 under (a)weighted average the method of costing and (b)the FIFO method of costing:(1)unit costs for each cost component, (2)cost of production transferred to finished goods, (3)cost of work in process inventory of April 30.

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