Rockwood Industries manufactures wood furniture. In the Lamination Department, varnish is added when the goods are 60% complete as to overhead. The units that are spoiled during processing are found upon inspection at the end of production. Spoilage is considered discrete. Production Data for May 2021 Beginning inventory (80% complete as to labor, 70% complete as to overhead). ..2,000 units ..14,900 units Transferred in during the month. Ending inventory (40% complete as to labor, 20% complete as to overhead)... 3,000 units Normal Spoilage (found during final quality inspection). 200 units Abnormal Spoilage - found at 30% completion of direct labor and 15% of overhead; the sanding machine was misaligned and scarred the chairs).... 400 units P 15,020 P32,352 Prior Department Costs Varnish 14,030 Direct Labor 46,000 Overhead 113,564 P310,674 P343,026 Total Costs to Account for REQUIREMENT Prepare complete cost of production report using FIFO method containing the following: 1. Accounting for the physical flow of units 2. Equivalent units of production (EUP) 3. Costs, identifying the cost per equivalent unit 4. Cost Assignment, showing total cost to account and cost accounted for. All other units were transferred to finished goods. Cost Data for May 2021 Beginning work in process inventory: Prior Department Costs Varnish Direct Labor Overhead Current Period Costs: 1,900 4,388 11,044 P 137,080
Rockwood Industries manufactures wood furniture. In the Lamination Department, varnish is added when the goods are 60% complete as to overhead. The units that are spoiled during processing are found upon inspection at the end of production. Spoilage is considered discrete. Production Data for May 2021 Beginning inventory (80% complete as to labor, 70% complete as to overhead). ..2,000 units ..14,900 units Transferred in during the month. Ending inventory (40% complete as to labor, 20% complete as to overhead)... 3,000 units Normal Spoilage (found during final quality inspection). 200 units Abnormal Spoilage - found at 30% completion of direct labor and 15% of overhead; the sanding machine was misaligned and scarred the chairs).... 400 units P 15,020 P32,352 Prior Department Costs Varnish 14,030 Direct Labor 46,000 Overhead 113,564 P310,674 P343,026 Total Costs to Account for REQUIREMENT Prepare complete cost of production report using FIFO method containing the following: 1. Accounting for the physical flow of units 2. Equivalent units of production (EUP) 3. Costs, identifying the cost per equivalent unit 4. Cost Assignment, showing total cost to account and cost accounted for. All other units were transferred to finished goods. Cost Data for May 2021 Beginning work in process inventory: Prior Department Costs Varnish Direct Labor Overhead Current Period Costs: 1,900 4,388 11,044 P 137,080
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:Rockwood Industries manufactures wood furniture. In the Lamination Department, varnish is added when the goods are 60% complete as to overhead. The units that are spoiled during processing are found upon inspection at the end
of production. Spoilage is considered discrete.
Production Data for May 2021
Beginning inventory (80% complete as to labor,
70% complete as to overhead).
..2,000 units
..14,900 units
Transferred in during the month.
Ending inventory (40% complete as to labor,
20% complete as to overhead)...
3,000 units
Normal Spoilage (found during final quality inspection).
200 units
Abnormal Spoilage - found at 30% completion of direct labor
and 15% of overhead; the sanding machine was
misaligned and scarred the chairs)....
400 units
P 15,020
P32,352
Prior Department Costs
Varnish
14,030
Direct Labor
46,000
Overhead
113,564
P310,674
P343,026
Total Costs to Account for
REQUIREMENT
Prepare complete cost of production report using FIFO method containing the following:
1. Accounting for the physical flow of units
2. Equivalent units of production (EUP)
3. Costs, identifying the cost per equivalent unit
4. Cost Assignment, showing total cost to account and cost accounted for.
All other units were transferred to finished goods.
Cost Data for May 2021
Beginning work in process inventory:
Prior Department Costs
Varnish
Direct Labor
Overhead
Current Period Costs:
1,900
4,388
11,044
P 137,080
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