FIFO method (continuation of 17-36). 1. Complete Problem 17-36 using the FIFO...

FIFO method (continuation of 17-36).

1. Complete Problem 17-36 using the FIFO method of process costing.

2. If you did Problem 17-36, explain any difference between the cost of work completed and transferred out and the cost of ending work in process in the assembly department under the weighted-average method and the FIFO method. Should McKnight’s managers choose the weighted-average method or the FIFO method? Explain briefly.

17-36 Weighted-average method. McKnight Handcraft is a manufacturer of picture frames for large retailers. Every picture frame passes through two departments: the assembly department and the finishing department. This problem focuses on the assembly department. The process-costing system at McKnight has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added when the assembly department process is 10% complete. Conversion costs are added evenly during the assembly department’s process. McKnight uses the weighted-average method of process costing. Consider the following data for the assembly department in April 2014:

1. Summarize the total assembly department costs for April 2014, and assign them to units completed (and transferred out) and to units in ending work in process.

2. What issues should a manager focus on when reviewing the equivalent units calculation?