Costs per Equivalent Unit and Production Costs The following information concerns production in the Forging Department for June. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $18,000 of direct materials. ACCOUNT ACCOUNT NO. Date Item Debit Credit Balance Debit Balance Credit June 1 Bal., 1,800 units, 60% completed 21,132 30 Direct materials, 25,800 units 247,680 268,812 30 Direct labor 43,300 312,112 30 Factory overhead 33,740 345,852 30 Goods transferred, ? units ? ? 30 Bal., 2,800 units, 70% completed ?
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.
Costs per Equivalent Unit and Production Costs
The following information concerns production in the Forging Department for June. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $18,000 of direct materials.
ACCOUNT ACCOUNT NO.
| Date | Item | Debit | Credit | Balance Debit |
Balance Credit |
|---|---|---|---|---|---|
| June 1 | Bal., 1,800 units, 60% completed | 21,132 | |||
| 30 | Direct materials, 25,800 units | 247,680 | 268,812 | ||
| 30 | Direct labor | 43,300 | 312,112 | ||
| 30 | Factory |
33,740 | 345,852 | ||
| 30 | Goods transferred, ? units | ? | ? | ||
| 30 | Bal., 2,800 units, 70% completed | ? |
Cost per equivalent units of $9.60 for Direct Materials and $3.00 for Conversion Costs.
Based on the above data, determine each of the following amounts. If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar.
a. Cost of beginning work in process inventory completed in June
fill in the blank 1 of 1$
b. Cost of units transferred to the next department during June
fill in the blank 1 of 1$
c. Cost of ending work in process inventory on June 30
fill in the blank 1 of 1$
d. Costs per equivalent unit of direct materials and conversion included in the June 1 beginning work in process (If required, round your answers to two decimal places.)
Direct materials cost per equivalent unit fill in the blank 1 of 2$
Conversion cost per equivalent unit fill in the blank 2 of 2$
e. The June increase or decrease in costs per equivalent unit for direct materials and conversion from the previous month (May) (If required, round your answers to two decimal places.)
| Increase or Decrease | Amount | |
|---|---|---|
| Change in direct materials cost per equivalent unit | fill in the blank 1 of 4
|
fill in the blank 2 of 4$ |
| Change in conversion cost per equivalent unit | fill in the blank 3 of 4
|
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