3 ok 3 nt ences Required information [The following information applies to the questions displayed below.] Victory Company uses weighted average process costing. The company has two production processes. Conversion cost is added evenly throughout each process. Direct materials are added at the beginning of the first process. Additional information for the first process follows. Beginning work in process inventory Units started this period Units completed and transferred out Ending work in process inventory Beginning work in process inventory Direct materials Conversion Costs added this period Direct materials. Conversion Total costs to account for Beginning work in process Units started this period Total units Units 60,000 820,000 700,000 180,000 $ 420,000 139,000 Units 2,220,000 3,254,000 Direct Materials Percent Complete 100% Percent Complete 100% Required: 1. Compute equivalent units of production for both direct materials and conversion. Conversion Percent Complete 80% $ 559,000 5,474,000 $ 6,033,000 Equivalent Units of Production (EUP) - Weighted Average Method Direct Materials EUP 30% Conversion Percent Complete EUP
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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Required information
[The following information applies to the questions displayed below.]
Victory Company uses weighted average process costing. The company has two production processes. Conversion cost
is added evenly throughout each process. Direct materials are added at the beginning of the first process. Additional
information for the first process follows.
Beginning work in process inventory
Units started this period
Units completed and transferred out
Ending work in process inventory
Beginning work in process inventory
Direct materials
Conversion
2
Costs added this period
Direct materials
Conversion
Total costs to account for
Beginning work in process
Units started this period
Total units
F2
W
#
3
Required:
1. Compute equivalent units of production for both direct materials and conversion.
80
F3
E
S D
SA
4
Units
F4
Units
R
60,000
820,000
700,000
180,000
F
Equivalent Units of Production (EUP) - Weighted Average Method
Direct Materials
$ 420,000
139,000
2,220,000
3,254,000
%
5
Percent
Complete
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Direct
Materials Conversion
Percent
Complete
100%
Prev
100%
T
$ 559,000
5,474,000
$ 6,033,000
EUP
Percent
Complete
80%
1
ヘ6
S
2
F6
30%
Conversion
Percent
Complete
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EUP
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EQUIVALENT UNITS OF PRODUCTION
Equivalent Production is represents the production of a process in terms of completed units. In other words it means converting the incomplete production units into its equivalent of complete units.
Equivalent units of work-in-progress
= Actual no.of units in process of manufacture x Percentage of work completed
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