Process Costing: FIFO Costing Method

P6. Canned fruits and vegetables are the main products made by Yummy Foods, Inc. All direct materials are added at the beginning of the Mixing Department’s process. When the ingredients have been mixed, they go to the Cooking Department. There the mixture is heated to 100° Celsius and simmered for 20 minutes. When cooled, the

 

 

 

 

 

 

 

 

 

mixture goes to the Canning Department for final processing. Throughout the opera- tions, direct labor and overhead costs are incurred uniformly. No direct materials are added in the Cooking Department. Cost data and other information for the Mixing Department for January are as follows.

 

Production Cost Data

Mixing Department:

 

Direct Materials

 

Conversion Costs

 

Beginning inventory                                                        $  28,560                     $    5,230

Current period costs                                                           450,000                                                                                                   181,200 Work in process inventory:

Beginning inventory (40% complete in prior period)         5,000 liters Ending inventory (60% complete)                               6,000 liters

Unit production data:

Units started during January                                               90,000 liters

Units transferred out during January                                 89,000 liters

 

 

 

 

 

 

 

 

 

 

 

 

Assume that no spoilage or evaporation loss took place during January.

rEQUIrED

1.    Using the FIFO costing method, prepare a process cost report for the Mixing Department for January.

2.    aCCoUNtING CoNNeCtIoN ▶  Explain  how  the  analysis  for  the  Cooking  Depart- ment will differ from the analysis for the Mixing Department.