30) Lexington Company produces baseball bats and cricket paddles. It has two departments that process all products. During July, the beginning work in process in the cutting department was half completed as to conversion, and complete as to direct materials. The beginning inventory included $40,000 for materials and $60,000 for conversion costs. Ending work-in-process inventory in the cutting department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 80% complete as to conversion. materials for finishing the units are added near the end of the process. Beginning inventorie included $24,000 for transferred-in costs and $28,000 for conversion costs. Ending inventory 30% complete. Additional information about the two departments follows: Cutting 20,000 60,000 64,000 Finishing Beginning workin-process units Units started this period Units transferred this period Ending workin-process units 24,000 68,000 20,000 Material costs added $48,000 28,000 128,000 $34,000 68,500 Conversion costs Transferredout cost Required: Prepare a production cost worksheet, using FIFO for the finishing department.
30) Lexington Company produces baseball bats and cricket paddles. It has two departments that process all products. During July, the beginning work in process in the cutting department was half completed as to conversion, and complete as to direct materials. The beginning inventory included $40,000 for materials and $60,000 for conversion costs. Ending work-in-process inventory in the cutting department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 80% complete as to conversion. materials for finishing the units are added near the end of the process. Beginning inventorie included $24,000 for transferred-in costs and $28,000 for conversion costs. Ending inventory 30% complete. Additional information about the two departments follows: Cutting 20,000 60,000 64,000 Finishing Beginning workin-process units Units started this period Units transferred this period Ending workin-process units 24,000 68,000 20,000 Material costs added $48,000 28,000 128,000 $34,000 68,500 Conversion costs Transferredout cost Required: Prepare a production cost worksheet, using FIFO for the finishing department.
Chapter1: Financial Statements And Business Decisions
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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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Transcribed Image Text:**Transcription for Educational Website:**
**Lexington Company Production Process Overview**
Lexington Company specializes in manufacturing baseball bats and cricket paddles. The production cycle involves two main departments: Cutting and Finishing.
**Cutting Department:**
- During July, the beginning work in process was 50% complete in terms of conversion and fully complete regarding direct materials.
- Beginning inventory:
- Materials: $40,000
- Conversion Costs: $60,000
- Ending work-in-process inventory was 40% complete.
- Direct materials are introduced at the start of the process.
**Finishing Department:**
- The beginning work in process was 80% complete concerning conversion, with material addition near the process's endpoint.
- Beginning inventory costs:
- Transferred-in Costs: $24,000
- Conversion Costs: $28,000
- Ending inventory was 30% complete.
**Production Data:**
| Details | Cutting | Finishing |
|-------------------------------------|---------|-----------|
| Beginning work-in-process units | 20,000 | 24,000 |
| Units started this period | 60,000 | |
| Units transferred this period | 64,000 | 68,000 |
| Ending work-in-process units | | 20,000 |
| | | |
| Material costs added | $48,000 | $34,000 |
| Conversion costs | $28,000 | $68,500 |
| Transferred-out cost | $128,000| |
**Requirement:**
- Prepare a production cost worksheet using the FIFO method for the Finishing Department.
*Note: This section provides detailed information about operational processes, inventories, and cost breakdowns, crucial for students learning about production accounting and process costing.*
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