High Power International manufactures wheel rims at their Canberra plant. Within this plant, process costing is employed and it is assumed that all raw materials are added at the start of the production process. Conversion costs occur evenly throughout the production cycle.

The following information relates to the production of wheels in February 2022:

Work in process - 01/02/2022 (82% complete)	7,470 units
Raw materials	$1,135,440
Conversion	$232,765
Work in process - 28/02/2022 (89% complete)	6,540 units
Wheels commenced in February	72,000 units
Costs incurred:
Raw materials	$11,160,000
Conversion	$2,614,507

Required:

1. Use Excel to determine the value of the closing WIP and the value of goods transferred out during the period under the:

   1. Weighted Average Cost Method.

   2. First-in-First-Out (FIFO) method.

2. Briefly discuss your results under both the weighted average cost and FIFO methods. Identify the underlying reasons for any differences and provide a recommendation in regards to which method provides the most relevant information for management decision-making.

Answer rating: 100% (QA)

1 a Value of Closning WIP and goods transferred under WACM Raw materials on Opening units in WIP 113... View the full answer