2. Department A had 16,000 units in the beginning work in process that is 45% with respect to material and 80% completed with respect to conversion costs. 12,000 units were added during the period; 20,000 units were completed and transferred and the remaining units in ending work-in-process were 65% completed with respect to materials and 35% completed with respect to conversion cost. The following additional information relate to the cost incurred: Work in Process (Material is $750,000; Conversion $1,250,000) Cost Added this period (Material is $2,000,000; Conversion $1,000,000) Required: Given the quantity schedule that has been prepared for you below, a. What is the cost of units completed and transferred? b. What is the cost of the units in ending work-in-process? Quantity Schedule (Weighted Average Process Costing Method) WIP beginning Units added this period Units to be accounted for Completed and Transferred Ending WIP Material 65%; Conversion 35% Total units accounted for Total equivalent units of production Total Materials Conversion Units 16,000 12,000 28,000 20,000 8,000 28,000 Equivalent Units of Production Materials Conversion 20,000 20,000 5,200 25,200 2,800 22,800
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.
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