Arsenio Company manufactures a single product that goes through two processes, mixing and cooking. The following data pertain to the mixing department for August Work-in-process inventory, August 1 Conversion: 70% complete 31,000 units Work-in-process inventory, August 31 Conversion: 50% complete 34,000 units Units started 69,000
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.
Arsenio Company manufactures a single product that goes through two processes, mixing and cooking. The following data pertain to the mixing department for August
| Work-in-process inventory, August 1 | ||
|---|---|---|
| Conversion: 70% complete | 31,000 | units |
| Work-in-process inventory, August 31 | ||
| Conversion: 50% complete | 34,000 | units |
| Units started | 69,000 | |
| Units completed and transferred out | ? | |
| Costs | ||
| Work-in-process inventory, August 1 | ||
| Material X | $ 60,900 | |
| Material Y | 86,100 | |
| Conversion | 119,860 | |
| Costs added during August | ||
| Material X | 154,500 | |
| Material Y | 98,700 | |
| Conversion | 228,740 |
Material X is added at the beginning of work in the mixing department. Material Y is also added in the mixing department, but not until units are 80% complete with regard to conversion. Conversion costs are incurred uniformly during the process. The company uses the weighted-average cost method
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Calculate the equivalent units and costs per equivalent unit of material X, material Y, and conversion for the mixing department.
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Calculate the cost of units transferred out.
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Calculate the cost of the ending Work-in-Process Inventory.
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