Figure 6-11
Rawlings, Inc. manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the Mixing Department. Information for the Mixing Department for January follows:
During January, 26,750 units were completed and transferred to the Molding Department. The following costs were incurred by the Mixing Department during January:

-Phantom Enterprises adds materials to production at the beginning of the process in the Production Department. It uses a single-step process. Data on material for this department for July 2016 are as follows: Production data (units):
Manufacturing cost:
Work in process, beginning $39,000
Materials used in July $186,000
The company uses the FIFO inventory method.
The materials cost in Work in Process on July 31 is

Question

Figure 6-11
Rawlings, Inc. manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the Mixing Department. Information for the Mixing Department for January follows:
  During January, 26,750 units were completed and transferred to the Molding Department. The following costs were incurred by the Mixing Department during January:
 
-Phantom Enterprises adds materials to production at the beginning of the process in the Production Department. It uses a single-step process. Data on material for this department for July 2016 are as follows: Production data (units):
 Manufacturing cost:
Work in process, beginning $39,000
Materials used in July $186,000
The company uses the FIFO inventory method.
The materials cost in Work in Process on July 31 is

Quizplus · Accepted Answer

To determine the materials cost in Work in Process on July 31 using the FIFO method, we need to assume that all units from the beginning work in process (WIP) are completed first, and then any additional units started in July.

To calculate the materials cost in WIP, we need to first determine how many units were started in July. This can be calculated as:

Units started in July = Total units completed and transferred out - Units in beginning WIP
Units started in July = 26,750 - 2,500
Units started in July = 24,250

Next, we need to calculate the materials cost per unit. This can be calculated as:

Materials cost per unit = Materials used in July / Total units started in July
Materials cost per unit = $186,000 / 24,250
Materials cost per unit = $7.67 per unit

Finally, we can calculate the materials cost in WIP on July 31 as:

Materials cost in WIP = Units in WIP on July 31 x Materials cost per unit

Since we are using the FIFO method, the units in WIP on July 31 will be the 500 units started in July. Therefore:

Materials cost in WIP = 500 x $7.67
Materials cost in WIP = $3,835

Adding the materials cost in WIP on July 31 to the materials cost in beginning WIP:

Total materials cost in WIP = $3,835 + $39,000
Total materials cost in WIP = $42,835

Therefore, the correct answer is D) $46,500.

Figure 6-11 Rawlings, Inc. Manufactures a Product That Passes Through Two Processes