Albany Company accumulates costs for its product using process costing. Direct material is added at the beginning of the production process, and conversion activity occurs uniformly throughout the process. Production Report For August 20x1 Percentage of Equivalent Units Completion Physical with Respect Direct Units to Conversion Material Conversion Work in process, August.............................. 140,000 80% Units started during August ......................... 80,000 Total units to account for............................. 120,000 Units completed and transferred out during August ..................... 100,000 100,000 100,000 Work in process, August 31......................... 20,000 30% 20,000 6,000 Total units accounted for ............................. 120,000 Direct Material Conversion Total Work in process, August 1.............................................. $ 42,000 $ 305,280 $ 347,280 Costs incurred during August ......................................... 96,000 784,400 880,400 Total costs to account for................................................ $138,000 $1,089,680 $1,227,680 Required: Use weighted-average process costing in completing the following requirements. 1. Prepare a schedule of equivalent units. 2. Compute the costs per equivalent unit. 3. Compute the cost of goods completed and transferred out during August. 4. Compute the cost remaining in the work-in-process inventory on August 31. 5. Prepare a journal entry to record the transfer of the cost of goods completed and transferred out during August.
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.
Albany Company accumulates costs for its product using
at the beginning of the production process, and conversion activity occurs uniformly throughout
the process.
Production Report
For August 20x1
Percentage of Equivalent Units
Completion
Physical with Respect Direct
Units to Conversion Material Conversion
Work in process, August.............................. 140,000 80%
Units started during August ......................... 80,000
Total units to account for............................. 120,000
Units completed and
transferred out during August ..................... 100,000 100,000 100,000
Work in process, August 31......................... 20,000 30% 20,000 6,000
Total units accounted for ............................. 120,000
Direct
Material Conversion Total
Work in process, August 1.............................................. $ 42,000 $ 305,280 $ 347,280
Costs incurred during August ......................................... 96,000 784,400 880,400
Total costs to account for................................................ $138,000 $1,089,680 $1,227,680
Required: Use weighted-average process costing in completing the following requirements.
1. Prepare a schedule of equivalent units.
2. Compute the costs per equivalent unit.
3. Compute the cost of goods completed and transferred out during August.
4. Compute the cost remaining in the work-in-process inventory on August 31.
5. Prepare a
during August.
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