Total costs transferred to Department 2
Extracted text: Nico Manufacturing Company applies process costing in the manufacture of its best-seller product, “brilliant" Manufacturing starts in Department 1 where all materials are added at the start of the process. The good units ar then transferred to Department 2 where all the incremental materials needed for its completion are added after fina inspection. In Department 1, units are inspected at the 100% stage of production while in Department 2, inspection takes place when the units are 90% completed. Department 1 uses FIFO costing while Department 2 uses th weighted average costing. The production data for the month of February show the following: Department 1 Department 2 UNITS Units in process, February 1, 2014 Work completed Units in process, February 28 Work to be completed Started in process during February Normal spoilage Abnormal spoilage Work in Process, February 1: Transferred in 8,000 1/5 12,000 1/3 4,000 4/5 7,000 2/7 60,000 (4% of units started in process) _(25% of normal spoilage) 1,000 500 P - P 216,000 P 156,000 P 456,720 P 343,800 P 449,160 Materials Conversion costs Current costs: Transferred in P - P 2 Materials P3,168,000 P1,344,000 P2,052,000 Conversion costs P4,942,080