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Question: Required: 1. Do Problem 17-36 using

Required: 1. Do Problem 17-36 using the FIFO method of process costing. Explain any difference between the cost per equivalent unit in the assembly department under the weighted-average method and the FIFO method. 2. Should Hoffman’s managers choose the weighted-average method or the FIFO method? Explain briefly. From problem 36: Hoffman Company manufactures car seats in its Boise plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Hoffman Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Hoffman Company uses the weighted-average method of process costing. Data for the assembly department for October 2017 are as follows:
Required:
1. Do Problem 17-36 using the FIFO method of process costing. Explain any difference between the cost per equivalent unit in the assembly department under the weighted-average method and the FIFO method. 
2. Should Hoffman’s managers choose the weighted-average method or the FIFO method? Explain briefly.

From problem 36:
Hoffman Company manufactures car seats in its Boise plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Hoffman Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. 
Hoffman Company uses the weighted-average method of process costing. Data for the assembly department for October 2017 are as follows:





Transcribed Image Text:

Direct Physical Units (Car Seats) 4,000 Conversion Materials Costs Work in process, October 1ª Started during October 2017 Completed during October 2017 Work in process, October 31 Total costs added during October 2017 $1,248,000 $ 241,650 22,500 26,000 500 $4,635,000 $2,575,125 *Degree of completion: direct materials,?%; conversion costs, 45%. "Degree of completion: direct materials,?%; conversion costs, 65%.



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