Brite Ideas, Incorporated, mass-produces reading lamps. Materials used in constructing the body of the lamp are added at the start of the process, while the materials used in wiring the lamps are added at the halfway point. All labor and overhead are added evenly throughout the manufacturing process. Brite Ideas uses process costing and had the following unit production information available for the months of June and July. Number of lamps in beginning work in process Lamps transferred to finished goods Number of lamps in ending work in process June July 890 1,400 2,990 1,400 3,400 800 In June, the lamps in beginning work in process were approximately 90 percent complete, while those in ending work in process were only 30 percent complete. In July, the units remaining in ending work in process were 80 percent complete. All lamps in ending work in process each month are finished in the following month. Required a. For the month of June, calculate the equivalent units of production for the three major cost categories-body materials. wiring materials, and labor and overhead. b. For the month of July, calculate the equivalent units of production for the three major cost categories-body materials, wiring materials, and labor and overhead. Cost Categories a. June: Equivalent Units Body materials Wiring materials Labor and Overhead b. July: Body materials Wiring materials Labor and Overhead
Brite Ideas, Incorporated, mass-produces reading lamps. Materials used in constructing the body of the lamp are added at the start of the process, while the materials used in wiring the lamps are added at the halfway point. All labor and overhead are added evenly throughout the manufacturing process. Brite Ideas uses process costing and had the following unit production information available for the months of June and July. Number of lamps in beginning work in process Lamps transferred to finished goods Number of lamps in ending work in process June July 890 1,400 2,990 1,400 3,400 800 In June, the lamps in beginning work in process were approximately 90 percent complete, while those in ending work in process were only 30 percent complete. In July, the units remaining in ending work in process were 80 percent complete. All lamps in ending work in process each month are finished in the following month. Required a. For the month of June, calculate the equivalent units of production for the three major cost categories-body materials. wiring materials, and labor and overhead. b. For the month of July, calculate the equivalent units of production for the three major cost categories-body materials, wiring materials, and labor and overhead. Cost Categories a. June: Equivalent Units Body materials Wiring materials Labor and Overhead b. July: Body materials Wiring materials Labor and Overhead
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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:Brite Ideas, Incorporated, mass-produces reading lamps. Materials used in constructing the body of the lamp are added at
the start of the process, while the materials used in wiring the lamps are added at the halfway point. All labor and overhead
are added evenly throughout the manufacturing process. Brite Ideas uses process costing and had the following unit
production information available for the months of June and July.
Number of lamps in beginning work in process
Lamps transferred to finished goods
Number of lamps in ending work in process
June
July
890
1,400
2,990
1,400
3,400
800
In June, the lamps in beginning work in process were approximately 90 percent complete, while those in ending work in
process were only 30 percent complete. In July, the units remaining in ending work in process were 80 percent complete.
All lamps in ending work in process each month are finished in the following month.
Required
a. For the month of June, calculate the equivalent units of production for the three major cost categories-body materials.
wiring materials, and labor and overhead.
b. For the month of July, calculate the equivalent units of production for the three major cost categories-body materials,
wiring materials, and labor and overhead.
Cost Categories
a. June:
Equivalent
Units
Body materials
Wiring materials
Labor and Overhead
b. July:
Body materials
Wiring materials
Labor and Overhead
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