Question:
Cost of Production Report Fifo Method. Jersey-Schell, Inc. uses three departments to produce a hair spray. The Finishing Department is the third and last step before the product is transferred to storage vats for bottling or wholesale distribution.
All materials needed to give the hair spray its final composition are added at the beginning of the process in the Finishing Department. Any lost units occur only at this point.
The company uses the fifo method in its cost system. The following data for the Finishing Department for October have been made available:
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Production data:
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In process, October 1
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10,000 gals.
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(Labor and factory overhead, 3/4 complete)
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Transferred in from preceding department
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40,000 gals.
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Finished and transferred to storage
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35,000 gals.
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In process, October 31
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10,000 gals.
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(Labor and factory overhead, 1/2 complete)
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Additional data:
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Inventory work in process - October 1
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Cost from preceding department
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$ 38,000
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Cost from this department:
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Materials
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21,500
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Labor
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39,000
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Factory overhead
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42,000
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Total inventory work in process, October 1
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$140,500
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Transferred in during October
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$140,000
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Cost added in this department:
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Materials
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$ 70,000
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Labor
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162,500
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Factory overhead
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130,000
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Total cost added
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$362,500
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Total cost to be accounted for
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$643,000
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Required: A cost of production report for October