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 53,800 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 257,000 gallons at a cost of $661,000 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

UNITS TO ACCOUNT FOR:
Beginning Work in Process units			53,800
Add: Units Started in Process			2,57,000
Total Units to account for:			3,10,800
UNITS TO BE ACCOUNTED FOR:
Units completed from beginning WIP		53800
Units started and completed			1,53,200
Ending Work in Process			1,03,800
Total Units to be accounted for:		3,10,800
Equivalent Units:
			UNITS	Transferred in cost
				% Completion	Units
Units completed from Beg.	53800	0%	0
Units started and completed	153200	100%	1,53,200
Ending Work in Process	103800	100%	1,03,800
Total Equivalent units	310800		2,57,000
TOTAL COST TO ACCOUNT FOR:
				Transferred in Cost
Cost Added during May		6,61,000
Total Cost to account for:		6,61,000
Equivalent Units			2,57,000
Cost per Equivalent unit		2.57