Do Exercise 4.20 using the FIFO method of process costing. Explain any difference between the cost of work completed and transferred out and cost of closing work in progress in the Assembly Department under the weighted-average method and the FIFO method.

Data From Exercise# 4.20

Euro-Défense is a manufacturer of military equipment. Its Tourcoing plant manufactures the Déca-Pite missile under contract to the French government and friendly countries. All Déca-Pites go through an identical manufacturing process. Every effort is made to ensure that all Déca-Pites are identical and meet many demanding performance specifications. The product-costing system at the Tourcoing plant has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Each Déca-Pite passes through two departments – the Assembly Department and the Testing Department. Direct materials are added at the opening of the process in Assembly. Conversion costs are added evenly throughout the two departments. When the Assembly Department finishes work on each Déca-Pite, it is immediately transferred to Testing.

Euro-Défense uses the weighted-average method of process costing. Data for the Assembly Department for October 2018 are:

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Direct Conversion Physical units (missiles) materials costs Work in progress, 1 October* Started during October 20 €460 000 €120 000 80 Completed during October 90 Work in progress, 31 October 10 Costs added during October €2 000 000 €935 000 * Degree of completion: direct materials, 2%; conversion costs, 60%. I Degree of completion: direct materials, 2%; conversion costs, 70%.