Refer to the Following Information About the Shaping Department of the Minnesota

question 117

Essay

Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the FIFO method of inventory costing.
$$\begin{array} { l | l | l } & \begin{array} { l } \text { Equivalent } \\\text { Units }\end{array} & \begin{array} { l } \text { Total } \\\text { Cost }\end{array} \\\hline \text { Beginning Work in Process: } & & \\\hline \text { Costs from prior month } & & \$ 7,000 \\\hline \text { Materials added } & 300 & \\\hline \text { Labor and overhead added } & 375 & \\\hline \text { Started and completed goods: } & & \\\hline \text { Materials added } & 2,000 & \\\hline \text { Labor and overhead added } & 2,000 & \\\hline \text { Ending Work in Process: } & & \\\hline \text { Materials added } & 320 & \\\hline \text { Labor and overhead added } & 360 &\end{array}$$ The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00.Prepare a cost reconciliation for the month of August.

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Definitions:

Lags

Delays in the effect of economic policies or other changes in the economy, which can affect the timing and efficiency of economic outcomes.

Discretionary Fiscal Policy

Fiscal measures, such as government spending and taxation, actively applied by a government to influence the economy, especially to counteract recession or control inflation.

Inflation

The rate at which the widespread price level of goods and services rises, impairing the purchasing power.

Taxes

Mandatory financial charges or levies imposed by a government on individuals, corporations, or other entities to finance government spending and various public expenditures.