Malaga Industrials assembles its product in two departments: Cutting and Finishing. In the Finishing Department, direct materials (DM) are added at the end of the process. Malaga Industrials uses the First-in, First-out (FIFO) cost flow method. Additional information about the Finishing Department follows:
Required: 1. Prepare (a) a quantity (physical flow) schedule; and (b) compute the equivalent units for all inputs.
2. Calculate the costs per equivalent unit for all inputs. Round up your answers to the nearest cent (e.g., $0.433= $0.43).
3.Calculate: a. the total cost of goods transferred out; and
b. the cost of ending Work in Process.
4. Prepare the WIP: Finishing Department ledger account. Enter the account balances and all transactions for the period showing clearly the contra accounts.