A manufacturing company operates two processes. Output from Process 1 is transferred as input to Process 2. Output from Process 2 is the finished product. Data for the two processes in January are as follows: Process 1 Opening work in process Units introduced into the process Units completed and transferred to the next process (Process 2) Closing work-in-progress Material cost added during the period Conversion cost added during the period Process 2 Opening work-in-process Units transferred into the process from Process 1 Closing work-in-progress Units completed and transferred to finished goods inventory Costs for the period: Cost of production transferred from Process 1 Conversion cost added during the period Added materials during Process 2 Materials are input into Process 1 at the start of the process and conversion costs are incurred at a constant rate throughout processing. The closing work-in-progress in Process 1 at the end of January is estimated to be 50% complete for the conversion work. Required: Calculate: Nil 14,000 10,000 4,000 R70,000 R48,000 a) b) c) Nil 10,000 1,000 9,000 The materials from Process 1 are introduced at the start of processing in Process 2, but the added materials are introduced at the end of the process. Conversion costs are incurred at a constant rate throughout processing. The closing work-in-progress in Process 2 at the end of January is estimated to be 50% complete. R90,000 R57,000 R36,000 the cost of completed output from Process 1 and Process 2. the cost of the closing work-in-process in each process at the end of January. Prepare the Process 1 account and the Process 2 account for January.
A manufacturing company operates two processes. Output from Process 1 is transferred as input to Process 2. Output from Process 2 is the finished product. Data for the two processes in January are as follows: Process 1 Opening work in process Units introduced into the process Units completed and transferred to the next process (Process 2) Closing work-in-progress Material cost added during the period Conversion cost added during the period Process 2 Opening work-in-process Units transferred into the process from Process 1 Closing work-in-progress Units completed and transferred to finished goods inventory Costs for the period: Cost of production transferred from Process 1 Conversion cost added during the period Added materials during Process 2 Materials are input into Process 1 at the start of the process and conversion costs are incurred at a constant rate throughout processing. The closing work-in-progress in Process 1 at the end of January is estimated to be 50% complete for the conversion work. Required: Calculate: Nil 14,000 10,000 4,000 R70,000 R48,000 a) b) c) Nil 10,000 1,000 9,000 The materials from Process 1 are introduced at the start of processing in Process 2, but the added materials are introduced at the end of the process. Conversion costs are incurred at a constant rate throughout processing. The closing work-in-progress in Process 2 at the end of January is estimated to be 50% complete. R90,000 R57,000 R36,000 the cost of completed output from Process 1 and Process 2. the cost of the closing work-in-process in each process at the end of January. Prepare the Process 1 account and the Process 2 account for January.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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:Question 7
A manufacturing company operates two processes. Output from Process 1 is transferred as input to
Process 2. Output from Process 2 is the finished product.
Data for the two processes in January are as follows:
Process 1
Opening work in process
Units introduced into the process
Units completed and transferred to the next process (Process 2)
Closing work-in-progress
Material cost added during the period
Conversion cost added during the period
Materials are input into Process 1 at the start of the process and conversion costs are incurred at a
constant rate throughout processing. The closing work-in-progress in Process 1 at the end of January is
estimated to be 50% complete for the conversion work.
Process 2
Opening work-in-process
Units transferred into the process from Process 1
Closing work-in-progress
Units completed and transferred to finished goods inventory
Costs for the period:
Cost of production transferred from Process 1
Conversion cost added during the period
Added materials during Process 2
Nil
14,000
10,000
4,000
R70,000
R48,000
Required:
Calculate:
a)
b)
c)
Nil
10,000
1,000
9,000
The materials from Process 1 are introduced at the start of processing in Process 2, but the added
materials are introduced at the end of the process. Conversion costs are incurred at a constant rate
throughout processing. The closing work-in-progress in Process 2 at the end of January is estimated to
be 50% complete.
R90,000
R57,000
R36,000
the cost of completed output from Process 1 and Process 2.
the cost of the closing work-in-process in each process at the end of January.
Prepare the Process 1 account and the Process 2 account for January.
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