Question

Transferred-In Cost

Powers Inc. produces a protein drink. The product is sold by the gallon. The company has two departments: Mixing and Bottling. For August, the bottling department had 64,300 gallons in beginning inventory (with transferred-in costs of $283,000) and completed 207,000 gallons during the month. Further, the mixing department completed and transferred out 290,000 gallons at a cost of $680,000 in August.

Required:

1. Prepare a physical flow schedule for the bottling department.

Powers Inc.
Physical Flow Schedule - Bottling Department
For the Month of August
Physical flow schedule:
Units in beginning work in process
Units started during the period
Total units to account for
Units completed and transferred out:
Units started and completed
Units completed from beginning work in process
Units in ending work in process
Total units accounted for

2. Calculate equivalent units for the transferred-in category.
equivalent units

3. Calculate the unit cost for the transferred-in category. If required, round your answer to the nearest cent.
$per unit

Answer 1

1
Physical flow schedule:
Units in beginning work in process		64300
Units started		290000
Total units to account for		354300
Units completed and transferred out:
Units started and completed	142700
Units completed from beginning work in process	64300	207000
Units in ending work in process		147300
Total units accounted for		354300
2
Equivalent units transferred-in = 354300
3
Unit-transferred-in cost = (bottling transfer cost +mixing transfer cost)/ equivalent units transferred in (283000+680000)/354300=	2.72