DRINK COKE Manufacturing Company applies process costing in the manufacture of its sole product, “vitamix”. Manufacturin

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DRINK COKE Manufacturing Company
applies process costing in the manufacture of its sole product,
“vitamix”. Manufacturing starts in Department 1 where materials are
all added at the start of processing. The good units are then
transferred to Department 2 where all the incremental materials
needed for its completion are added after final inspection. In
Department 1, units are inspected at the end of
processing while in Department 2, inspection takes place
when the units are 90% completed. Department 1
uses FIFO costing while Department 2 uses the weighted average
costing.
The production data for the month of
July show the following:
_______________________________________________________________________________
Department
1
Department 2
UNITS
Beginning work in process, July
1
8,
000


4, 000
Work done

1/5
4/5
Ending work in process, July
31
12,
000


7, 000
Work to be
done

1/3
2/7
Started in process during
July
60, 000
Normal
spoilage
2,
400


1, 000
Abnormal
spoilage

600


500
COST
Work in Process, July 1
Transferred
in
P -

P 19, 030
Materials
9,
000


14, 325
Conversion
costs
6,
500


18, 715
Current costs:
Transferred
in
P -

P ?
Materials
132,
000


56, 000
Conversion
costs
205,
920


85, 500
Required: For
both departments: