Second Department—FIFO Method
Refer to the data for Durall Company in Case 4–20. Assume that the company uses the FIFO method in its process costing system.
1. Prepare a report for the Forming Department for October showing how much cost should have been assigned to the units completed and transferred to the Stamping Department and to the ending work in process inventory.
2. Assume that in order to remain competitive, the company undertook a major cost-cutting program during October. Would the effects of this cost-cutting program tend to show up more under the weighted-average method or under the FIFO method? Explain your answer.
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