ABC Company, a manufacturing company that uses process costing, have two departments in its operations, the Processing Department and the Finishing Department. Data for Processing Department in June 2022 are as follows: Cost Data: Beginning Work in Process Materials 27,500 Labor 40,850 Overhead 49,125 Current Month Cost: Materials 47,500 Labor 66,250 Overhead 82,925 Production Data: Quantity: Work in Process – Beginning 15,000 Started in Process 25,000 Transferred out to Next Department From Work in Process – Beginning 15,000 Started and Completed 15,000 30,000 Work in Process – Ending 8,000 Lost Units – Normal 1,500 Abnormal Lost Units 500 Stage of Completion: Beginning Ending Materials 100% 100% Labor 50% 25% Overhead 75% 75% 1. Referring to Processing Department, what is the total cost allocated to abnormal spoilage using the weighted-average method? 2. Referring to Processing Department, what is the total cost allocated to abnormal spoilage using the FIFO method? 3. Referring to Processing Department, what is the total cost allocated to ending work in process inventory using the weighted-average method? 4. Referring to Processing Department, what is the total cost allocated to ending work in process inventory using the FIFO method? 5. Referring to Processing Department, what is the total cost allocated to transferred out using the weighted-average method? 6. Referring to Processing Department, what is the total cost allocated to transferred out using the FIFO method?
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.
ABC Company, a manufacturing company that uses
Data for Processing Department in June 2022 are as follows:
Cost Data:
| Beginning Work in Process | |
| Materials | 27,500 |
| Labor | 40,850 |
| 49,125 | |
| Current Month Cost: | |
| Materials | 47,500 |
| Labor | 66,250 |
| Overhead | 82,925 |
Production Data:
| Quantity: | ||
| Work in Process – Beginning | 15,000 | |
| Started in Process | 25,000 | |
| Transferred out to Next Department | ||
| From Work in Process – Beginning | 15,000 | |
| Started and Completed | 15,000 | 30,000 |
| Work in Process – Ending | 8,000 | |
| Lost Units – Normal | 1,500 | |
| Abnormal Lost Units | 500 | |
| Stage of Completion: | Beginning | Ending |
| Materials | 100% | 100% |
| Labor | 50% | 25% |
| Overhead | 75% | 75% |
1. Referring to Processing Department, what is the total cost allocated to abnormal spoilage using the weighted-average method?
2. Referring to Processing Department, what is the total cost allocated to abnormal spoilage using the FIFO method?
3. Referring to Processing Department, what is the total cost allocated to ending work in process inventory using the weighted-average method?
4. Referring to Processing Department, what is the total cost allocated to ending work in process inventory using the FIFO method?
5. Referring to Processing Department, what is the total cost allocated to transferred out using the weighted-average method?
6. Referring to Processing Department, what is the total cost allocated to transferred out using the FIFO method?
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