Ch4_2nd Dept. Weighted Average vs.FIFO

Ch4_2nd Dept. Weighted Average vs.FIFO - Case Study:...

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Case Study: Provost Industries – 2 nd Dept., Weighted Average VS. FIFO “I think we goofed when we hired that new assistant controller,” said Ruth Scarpino, president of Provost Industries. “Just look at this report that he prepared for last month for the Finishing Department. I can't make heads or tails out of it.” “He's struggling to learn our system,” replied Frank Harrop, the operations manager. “The problem is that he's been away from process costing for a long time, and it's coming back slowly.” “It's not just the format of his report that I'm concerned about. Look at that $25.71 unit cost that he's come up with for April. Doesn't that seem high to you?” said Ms. Scarpino. “Yes, it does seem high; but on the other hand, I know we had an increase in materials prices during April, and that may be the explanation,” replied Mr. Harrop. “I'll get someone else to redo this report and then we may be able to see what's going on.” Provost Industries manufactures
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Ch4_2nd Dept. Weighted Average vs.FIFO - Case Study:...

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