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I was assigned the following: "World Class Steaks is a meat processing firm based in Texas. It has two departments: preparation and shipping.

Hi I need help with FIFO process costing. I was assigned the following:


"World Class Steaks is a meat processing firm based in Texas. It has two departments: preparation and shipping. For the prep department conversion costs are added evenly during the process and the first direct material, meat, is added at the beginning of the process. A second material, seasoning, is added at 90% point in the process. All completed units are transferred to the shipping department.


Preparation Department:

Beginning Inventory contained 7,200 units (45% complete), meat-$10,632 and conversion $2,778

Units started were 60,000

Units completed were 49,200

Ending Inventory is 70% complete with respect to conversion


Within the Preparation Department, the following transactions occurred:

  1. Meat purchased for $125,000 on account. Seasoning purchased for $15,000 for cash.
  2. $111,000 of meat was put into process; seasoning used was $12,000.
  3. Direct labor incurred was $50,000; Manufacturing Overhead incurred was $39,664.
  4. Conversion is applied to production.
  5. Completed product was transferred to the Shipping Department."


I am asked to make a production cost worksheet assuming FIFO for the Preparation Department. I am confused on how I would integrate the second direct material, seasoning, into the problem at the 90% point in the process. Also, do I use the materials purchased or the materials used in the DM portion of this problem? SOS!

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