Department A Department B Beginning inventories: Physical units 5,000 8,000 Costs: Transferred in $ 45,320 Direct materials $10,000 Conversion costs $ 6,900 $ 16,800 Current production: Units started 25,000 Units transferred out 28,000 33,000 Costs: Transferred in Direct materials $57,800 $ 37,950 Conversion costs $95,220 $128,100 Percentage completion: Beginning inventory Ending inventory 40% 50% 80% 50%
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.
Weighted Average Method,
Seacrest Company uses a process-costing system. The company manufactures a product that is
processed in two departments: A and B. As work is completed, it is transferred out. All inputs
are added uniformly in Department A. The following summarizes the production activity and
costs for November:
Required:
1. Using the weighted average method, prepare the following for Department A: (a) a
physical flow schedule, (b) an equivalent unit calculation, (c) calculation of unit costs
(Note: Round to four decimal places.), (d) cost of EWIP and cost of goods transferred
out, and (e) a cost reconciliation.
2. CONCEPTUAL CONNECTION Prepare journal entries that show the flow of
conversion costs. Many firms are now combining direct labor and overhead costs into
one category. They are not tracking direct labor separately. Offer some reasons for this
practice.
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