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Healthy Selections Cereals, Incorporated (HSC) is a large food-processing company specializing in whole-grain, high-energy, lowcalorie, and low-fat cereals that appeal to the health-conscious consumer. HSC has a premium image in the market, and most of its customers are loyal and willing to pay a bit extra to get the healthy choice that HSC offers. HSC's cereals are made in a series of processes that begin with sorting, cleaning, preparing, and inspecting the direct materials (grains, nuts, and other ingredients). The materials are then mixed and processed for consistency, cooked, given a final inspection, and packaged. All materials are added only at the beginning of the first process. The inspections in the first and final processes are made at the end of those respective processes, so all direct materials and conversion costs are lost for any defective units detected at the inspection point. The company uses weighted-average process costing and accounts for all waste as normal spoilage. Currently, commodity prices are rising sharply, affecting the costs of many of the ingredients in HSC's products. The CFO, noting the sharp rise in the cost of the company's direct materials, has considered using the FIFO method. The following data are for the first process for the current month. All output is measured in pounds. The cost information for the first process is as follows: Required: 1. Prepare a production cost report for the first process using the weighted-average method. 2. Prepare a production cost report for the first process using the FIFO method. \begin{tabular}{|c|c|c|c|c|c|} \hline \multirow{2}{*}{ Input: } & \multirow[b]{2}{*}{ Physical Units } & \multirow{2}{*}{\multicolumn{2}{|c|}{ Completion Percentage }} & \multicolumn{2}{|c|}{ WA Equiv Units } \\ \hline & & & & \begin{tabular}{l} Direct \\ Materials \end{tabular} & Conversion \\ \hline Beginning WIP & 14,000 & & & & \\ \hline Direct materials & & 100 & % & & \\ \hline Conversion & & 25 & % & & \\ \hline Units started or trans-in & 33,000 & & & & \\ \hline Total to account for & 47,000 & & & & \\ \hline \multicolumn{6}{|l|}{ Output: } \\ \hline Units finish or trans-out & 34,000 & & % & & \\ \hline Normal spoilage & 1,000 & 100 & % & & \\ \hline Ending WIP & 12,000 & & & & \\ \hline Direct materials & & 100 & % & & \\ \hline Conversion & & 40 & % & & \\ \hline Total accounted for & 47,000 & & & & \\ \hline \multirow[t]{3}{*}{ Equivalent Units } & & & & 0 & 0 \\ \hline & \multicolumn{3}{|c|}{ Unit Cost Determination } & & \\ \hline & Direct Materials & Conversion & Total & & \\ \hline Beginning WIP & 3,325 & 3,380 & $6,705 & & \\ \hline Current costs & 66,000 & 104,000 & 170,000 & & \\ \hline Total & 69,325 & $107,380 & $176,705 & & \\ \hline Divide by equivalent units & 47,000 & 39,800 & & & \\ \hline WTAVG Cost per EU & 1.4750 & $2.6980 & 4.1730 & & \\ \hline Cost Assignment: Weighted-Average & & & \begin{tabular}{l} Completed \\ and Trans- \end{tabular} & Ending WIP & Total \\ \hline Finished goods & 34,000 & units & $141,882 & & 141,882 \\ \hline Plus: normal spoilage & 1,000 & units & 4,173 & & 4,173 \\ \hline Ending WIP & & units & & & \\ \hline Direct materials & 12,000 & units & & 17,700 & 17,700 \\ \hline Conversion & 4,800 & units & & 12,950 & 12,950 \\ \hline Total costs accounted for & & & $146,055 & 30,650 & 176,705 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|} \hline \multirow[b]{3}{*}{ Input: } & \multirow{3}{*}{ Physical Units } & & & \multicolumn{2}{|c|}{ FIFO Equiv Units } \\ \hline & & \multicolumn{2}{|c|}{ Completion Percentage } & \multirow[t]{2}{*}{\begin{tabular}{c} Direct \\ Materials \end{tabular}} & Conversion \\ \hline & & & & & \\ \hline Beginning WIP & 14,000 & & & & \\ \hline Direct materials & & 100 & % & & \\ \hline Conversion & & 25 & % & & \\ \hline Units started or trans-in & 33,000 & & & & \\ \hline Total to account for & 47,000 & & & & \\ \hline \multicolumn{6}{|l|}{ Output: } \\ \hline Units finish or trans-out & & & % & & \\ \hline Normal spoilage & & & % & & \\ \hline \multicolumn{6}{|l|}{ Ending WIP } \\ \hline Direct materials & & & % & & \\ \hline Conversion & & & % & & \\ \hline Total accounted for & 0 & & & & \\ \hline \multirow[t]{3}{*}{ Equivalent units } & & & & 0 & 0 \\ \hline & \multicolumn{3}{|c|}{ Unit Cost Determination } & & \\ \hline & Direct Materials & Conversion & Total & & \\ \hline Beginning WIP & & & 0 & & \\ \hline Current Costs & & & 0 & & \\ \hline Total & $ & 0 & 0 & & \\ \hline Divide by equivalent units & 33,000 & 36,300 & & & \\ \hline FIFO Cost per EU & & & \begin{tabular}{ll} $ & 0.0000 \\ \end{tabular} & & \\ \hline Cost Assignment: FIFO & & & \begin{tabular}{l} Completed \\ and Trans- \end{tabular} & Ending WIP & Total \\ \hline Prior period costs in beginn & & & & & \\ \hline Current costs to complete & & & & & \\ \hline Direct materials & & & & & \\ \hline Conversion & & units & & & \\ \hline Units started and finished & & units & & & \\ \hline Normal spoilage & & units & & & \\ \hline Total & & & & & $ \\ \hline Ending WIP & & units & & & \\ \hline Direct materials & & & & & 0 \\ \hline Conversion & & & & & 0 \\ \hline \end{tabular}

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