Reference no: EM132840274

Problem - In the stitching department of Garments Company, direct materials are added at the beginning of the process and all other manufacturing inputs are applied uniformly. Garments Company uses the weighted average costing method and for the month of February the stitching department's beginning work-in-process had 20,000 units that were 50% complete with respect to conversion costs and the costs related to this work were $350,000 for direct materials and $300,000 for conversion. During February, 100,000 units were completed and transferred out and ending work-in-process had 5,000 units that was 20% complete with respect to conversion costs. The costs incurred during February were $700,000 for direct materials and $700,000 for conversion.

Required -

1. Prepare a physical flow schedule.

2. Prepare a schedule of equivalent units.

3. Calculate the cost per equivalent unit (round amounts to two decimal places where necessary).

4. Calculate the cost of goods completed and transferred out and the cost of ending work-in- process, and total costs accounted for during February.

5. Should Garments Company continue to use the weighted average costing method to calculate unit costs if the cost of manufacturing inputs varies greatly from period to period, or should it consider adopting the alternative costing method? Explain and justify your answer.