The polishing department of Burgeo Tools operates a first-in, first-out process-costing system in which all direct materials are added when production in the department is 40 percent complete.

In contrast, conversion costs are incurred evenly during processing. The following information pertains to the polishing department's March production activities:

Required:
1. Prepare a physical flow analysis for the polishing department for March.
2. Calculate equivalent units of production for the polishing department for March.
3. Calculate the unit cost for the polishing department for March.
4. Calculate the cost of units transferred out and the cost of EWIP inventory.
5. Prepare a cost reconciliation for the polishing department for March.
6. Kimberleigh Williams, the manager of the polishing department, is considering changing from a first-in, first-out system to a weighted average system. To help in her analysis, she has asked for your opinion. Prepare a brief memo out- lining the advantages of a weighted average costing system.

Transcribed Image Text:

Conversion Physical Direct Units 400 4,000 3,600 800 Materials Costs Work in process at March 1 (60 percent complete) Started during March Completed during March Work in process at March 31 (20 percent complete) Cost incurred during March S 7,000 S 4,000 40,000 88,000