Steps for

P$6-10$ Weighted Average and FIFO cost methods; losses at the beginning and end of processing

Mt$.$ Palomar Manufacturing Co$.$ uses a process cost system. Its manufacturing operation is carried on in two departments: Machining and Finishing. The Machining Department uses the weighted average cost method, and the Finishing Department uses the FIFO cost method. Materials are added in both departments at the beginning of operations, but the added materials do not increase the number of units being processed. Units are lost in the Machining Department throughout the production process, and inspection occurs at the end of the process. The lost units have no scrap value and are considered to be a normal loss.

Production statistics for July show the following data:

Units in process, July $1($all material, $40\%$ of labor and overhead$).$

Machining Finishing

$20,000$

Units in process, July $1($all material, $80\%$ of labor and overhead$).q,$

Units started in production. $q,$

Units completed and transferred $q,$

Units transferred from Machining $q,$

Units completed and transferred to finished goods. $q,$

Units in process, July $31($all material, $60\%$ of labor and overhead$).q,$

Units in process, July $31($all material, $40\%$ of labor and overhead$).q,$

Units lost in production $q,$

$\backslash$table$[[140,000,40,000],[100,000,],[,100,000],[,100,000],[40,000,],[,],[20,000,40,000]]$

Production Costs

Work in process, July $1$:

Materials $q,$

Labor $q,$

Factory overhead $q,$

Costs in Machining Department $q,$

Production Costs

Costs incurred during month:

Materials $q,$

Labor $q,$

Factory overhead $q,$

$\backslash$table$[[$Machining$,$Finishing$],[,],[$$$40,000,$$$110,000$