. Dot and Ken Ice Cream uses a mixing department and a freezing department in producing its ice cream. Its process-costing system in the mixing department has two direct materials cost categories (ice cream mix and flavorings) and one conversion cost pool. The following data pertain to the mixing department for April 2017: Work in process, April 1 = 0 Started in April = 10,000 gallons Completed and transferred to freezing = 8,500 gallons Costs: Ice cream mix $27,000 Flavorings $ 4,080 Conversion costs $53,700 The ice cream mix is introduced at the start of operations in the mixing department, and the flavorings are added when the product is 40% completed in the mixing department. Conversion costs are added evenly during the process. The ending work in process in the mixing department is 30% complete. Q. Compute (a) the cost of goods completed and transferred to the freezing department during April and (b) the cost of work in process as of April 30, 2017.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
. Dot and Ken Ice Cream uses a mixing department and a freezing department in producing its ice cream. Its process-costing system in the mixing department has two direct materials cost categories (ice cream mix and flavorings) and one conversion cost pool. The following data pertain to the mixing department for April 2017:
Work in process, April 1 = 0
Started in April = 10,000 gallons
Completed and transferred to freezing = 8,500 gallons
Costs:
Ice cream mix $27,000
Flavorings $ 4,080
Conversion costs $53,700
The ice cream mix is introduced at the start of operations in the mixing department, and the flavorings are added when the product is 40% completed in the mixing department. Conversion costs are added evenly during the process. The ending work in process in the mixing department is 30% complete.
Q. Compute (a) the cost of goods completed and transferred to the freezing department during April and (b) the cost of work in process as of April 30, 2017.
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