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    Hiebert Chocolate, Ltd Production Reports

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    Cost Production Report

    The following data for the Packaging Department for March are available:
    Units: Packaging Department
    Beginning WIP-Units 10,000
    Started in production 80,000
    Transferred out 75,000
    Ending WIP Units- 15,000
    Beginning WIP- % complete 40%
    Ending WIP- % complete 80%
    Costs:
    Beginning WIP- transferred in costs $3,000
    Beginning WIP- materials costs ---
    Beginning WIP-Conversion costs $1,630
    Transferred-in costs $9,600
    Direct materials- Packaging $21,000

    Conversion costs:
    Direct labor $ 8,470
    Manufacturing overhead $ 7,300
    Total conversion costs $15,770

    Ben Hiebert, president of Hiebert Chocolate, Ltd, is trying to determine whether to use a weighted-average or FIFO product costing system, since Hiebert's contract with Wal-Mart allows for a sales price of cost per department + 15%.
    Requirements
    1. Consider only the Packaging Department data. Prepare cost of production reports using both weighted-average and FIFO process costing.
    2. Which method should Heibert use and why?

    © BrainMass Inc. brainmass.com October 10, 2019, 8:02 am ad1c9bdddf
    https://brainmass.com/business/management-accounting/hiebert-chocolate-ltd-production-reports-605823

    Solution Summary

    The solution is provided in excel format using cell references to show calculations. The solution shows, step-by-step, how to calculate the equivalent units as well as costs assigned to such units under both the weighted average and FIFO methods.

    $2.19