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# Transferred-In Costs, Weighted-Average, and FIFO Methods

Transferred-in costs, weighted-average and FIFO methods. Frito-Lay, Inc., manufactures convenience foods, including potato chips, and corn chips. Production of corn chips occurs in four departments: cleaning, mixing, cooking, and drying and packaging. Consider the Drying and Packaging Department, where direct materials (packaging) are added at the end of the process. Conversion costs are added evenly during the process. The accounting records of a Frito-Lay plant provide the following information for corn chips in its Drying and Packaging Department during a weekly period (week 37):
Physical Units (Cases Transferred-In Cost Direct Material Conversion Cost
Beginning work in process (a) 1,250 \$29,000 \$0 \$9,060
Transferred-in during week37 from Cooking Depqrtment 5,000
Completed during week 37 5,250
Ending work in process, week 37(b) 1,000
Cost added during week 37 \$96,000 \$25,200 \$38,400

(a) Degree of completion: transferred-in costs, 100%; direct materials,?%; conversion cost, 80%
(b) Degree of completion: transferred-in costs, 100%; direct materials, ? %; conversion cost, 40%

1) Using the weighted-average method, summarize the total Drying and Packaging Department costs for week 37, and assign these cost to units completed (and transferred out) and to units in ending work in process.

2) Assume that the FICO method is used for the Drying and Packaging Department. Under FIFO, the transferred-in costs for work-in-process beginning inventory in week 37 are \$28,920 and the transferred-in costs during week 37 from the Cooking Department are \$94,000. All other data are unchanged. Summarize the total Drying and Packaging Department costs for week 37, and assign these costs to units completed and transferred out and to units in ending work in process using the FIFO method.

1) Using the weighted-average method, summarize the total Drying and Packaging Department costs for week 37, and assign these cost to units completed (and transferred out) and to units in ending work in process.

2) Assume that the FICO method is used for the Drying and Packaging Department. Under FIFO, the transferred-in costs for work-in-process beginning inventory in week 37 are \$28,920 and the transferred-in costs during week 37 from the Cooking Department are \$94,000. All other data are unchanged. Summarize the total Drying and Packaging Department costs for week 37, and assign these costs to units completed and transferred out and to units in ending work in process using the FIFO method.

#### Solution Preview

Transferred-in costs, weighted-average and FIFO methods. Frito-Lay, Inc., manufactures convenience foods, including potato chips, and corn chips. Production of corn chips occurs in four departments: cleaning, mixing, cooking, and drying and packaging. Consider the Drying and Packaging Department, where direct materials (packaging) are added at the end of the process. Conversion costs are added evenly during the process. The accounting records of a Frito-Lay plant provide the following information for corn chips in its Drying and Packaging Department during a weekly period (week 37):

Physical Units (Cases Transferred-In Cost Direct Material Conversion Cost
Beginning work in process (a) 1,250 \$29,000 \$0 \$9,060
Transferred-in during week37 from Cooking Department 5,000
Completed during week 37 5,250
Ending work in process, week 37(b) 1,000
Cost added during week 37 \$96,000 \$25,200 \$38,400

(a) Degree of completion: transferred-in costs, 100%; direct materials,?%; conversion cost, 80%
(b) Degree of completion: transferred-in costs, 100%; direct materials, ? %; conversion cost, 40%

1) Using the weighted-average method, ...

#### Solution Summary

Excel file contains calculation of cost of ending inventory and cost of units completed using weighted average method and FIFO method.

\$2.19