Naruto Company makes product SAD in two separate departments: Department 1 and Department 2. Materials are introduced
Question:
Naruto Company makes product SAD in two separate departments: Department 1 and Department 2.
Materials are introduced in Department 1 and an additional material is added during the process. The
following information are available for the Department 2:
Production Data:
Beginning WIP Inventory-------------------------------- 8,000 units
Transferred In from Department 1 ------------------- 40,000 units
Ending WIP ------------------------------------------------ 4,000 units
STAGE OF COMPLETION Beginning WIP Ending WIP
Transferred in ?? ??
Direct materials 80% 70%
Direct Labor 40% 50%
Overhead 30% 40%
COSTS DATA Beginning WIP Current period
Transferred In P 132,000 P 540,000
Direct materials 47,000 161,600
Direct labor 12,000 171,200
Overhead 7,000 129,600
The company uses FIFO method of process costing. Based on the given data, answer the following questions:
1. The transfer of inventory from Department 1 to Department 2 includes a debit in WIP-Department 2 account by
what amount?
2. What is the cost per EUP of direct materials in Department 2?
3. What is the total cost of the completed units from the beginning WIP inventory?
4. What is the total cost of units completed and transferred to FG inventory during the month?
5. What is the total cost allocated to ending WIP?
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura