Assume the following information: Milling Department Units Percent Complete Materials Conversion Beginning work in process inventory 200 40% 30% Units started into production during March 6,200 Units completed during the period and transferred to the next department 5,800 100% 100% Ending work in process inventory 600 70% 60% Milling Department Materials Conversion Cost of beginning work in process inventory $ 10,000 $ 15,000 Costs added during the period 292,000 385,000 Total cost $ 302,000 $ 400,000 Using the weighted-average method, the total cost of the units completed during the period and transferred out to the next department with respect to materials is closest to:
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.
Assume the following information:
| Milling Department | Units | Percent Complete | |
|---|---|---|---|
| Materials | Conversion | ||
| Beginning work in process inventory | 200 | 40% | 30% |
| Units started into production during March | 6,200 | ||
| Units completed during the period and transferred to the next department | 5,800 | 100% | 100% |
| Ending work in process inventory | 600 | 70% | 60% |
| Milling Department | Materials | Conversion |
|---|---|---|
| Cost of beginning work in process inventory | $ 10,000 | $ 15,000 |
| Costs added during the period | 292,000 | 385,000 |
| Total cost | $ 302,000 | $ 400,000 |
Using the weighted-
Solution
Weighted average method is an inventory costing method that is assign average cost to each piece of inventory when it is sold during the year.
Its considers different degree of numbers in a data set.
In it average cost of material purchased charged to the job or process rather than actual cost.
Step by step
Solved in 3 steps
