QUESTION 10 Manama Company manufactures car seats. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Manama Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Manama Company uses the weighted-average method of process costing. Data for the assembly department for October 2021 are as follows: Physical (Car Seats) Units Direct Conversion Materials Costs 5,000 $1,250,000 $402,750 Work in process, October 1" Started during October 2021 20,000 Completed during October 2021 22,500 Work in process, October 31 2,500 Total costs added during October $4,500,000 $2,337,500 2021 "Degree of completion: direct materials 100%; conversion costs, 60%. "Degree of completion: direct materials,100%; conversion costs, 70%. Required: 1. Prepare a production cost worksheet with supporting schedules (i.e. showing all the five steps) using the Weighted average of process costing. 2. Prepare the journal entries for all October 2021 transactions affecting Work in Process-Assembly. TIEN+F10 (Mac) E = 3E E
QUESTION 10 Manama Company manufactures car seats. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Manama Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Manama Company uses the weighted-average method of process costing. Data for the assembly department for October 2021 are as follows: Physical (Car Seats) Units Direct Conversion Materials Costs 5,000 $1,250,000 $402,750 Work in process, October 1" Started during October 2021 20,000 Completed during October 2021 22,500 Work in process, October 31 2,500 Total costs added during October $4,500,000 $2,337,500 2021 "Degree of completion: direct materials 100%; conversion costs, 60%. "Degree of completion: direct materials,100%; conversion costs, 70%. Required: 1. Prepare a production cost worksheet with supporting schedules (i.e. showing all the five steps) using the Weighted average of process costing. 2. Prepare the journal entries for all October 2021 transactions affecting Work in Process-Assembly. TIEN+F10 (Mac) E = 3E E
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 10
Manama Company manufactures car seats. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at
Manama Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are
added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing.
Manama Company uses the weighted-average method of process costing. Data for the assembly department for October 2021 are as follows:
Physical
(Car Seats)
Units
Direct
Conversion
Materials
Costs
5,000
$1,250,000
$402,750
Work in process, October 1"
Started during October 2021
20,000
Completed during October 2021
22,500
Work in process, October 31
2,500
Total costs added during October
$4,500,000
$2,337,500
2021
"Degree of completion: direct materials 100%; conversion costs, 60%.
"Degree of completion: direct materials,100%; conversion costs, 70%.
Required:
1. Prepare a production cost worksheet with supporting schedules (i.e. showing all the five steps) using the Weighted average of process costing.
2. Prepare the journal entries for all October 2021 transactions affecting Work in Process-Assembly.
TIEN+F10 (Mac)
E = 3E E
Expert Solution
Step 1
- The total cost of producing a product, including raw materials and operating costs, is detailed in a production cost report.
- A journal entry is a form of accounting entry that is used to report a business transaction in a company's accounting records.
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