Enter the balance as of April 1 in a four-column account for Work in Process—Filling. Record the debits and credits in the account for April. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion; (b) cost per equivalent unit; (c) cost of goods finished, differentiating between units started in the prior period and units started and finished
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.
Work in Process Account Data for Two Months; Cost of Production Reports
Hearty Soup Co. uses a
| Bal., 600 units, 60% completed: | ||
| Direct materials (600 x $5.30) | $ 3,180 | |
| Conversion (600 x 60% x $2.20) | 792 | |
| $ 3,972 | ||
| From Cooking Department, 13,740 units | $74,196 | |
| Direct labor | 19,106 | |
| Factory |
10,288 |
During April, 600 units in process on April 1 were completed, and of the 13,740 units entering the department, all were completed except 1,500 units that were 20% completed.
Charges to Work in Process—Filling for May were as follows:
| From Cooking Department, 15,800 units | $88,480 |
| Direct labor | 26,270 |
| Factory overhead | 14,146 |
During May, the units in process at the beginning of the month were completed, and of the 15,800 units entering the department, all were completed except 800 units that were 80% completed.
Required:
1. Enter the balance as of April 1 in a four-column account for Work in Process—Filling. Record the debits and credits in the account for April. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion; (b) cost per equivalent unit; (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in April; and (d) work in process inventory. If an amount box does not require an entry, leave it blank.
| ACCOUNT | Work in Process-Filling Department | ACCOUNT NO. | ||||
|---|---|---|---|---|---|---|
| Balance | ||||||
| DATE | ITEM | POST. REF. | DEBIT | CREDIT | DEBIT | CREDIT |
| May 1 | Balance | fill in the blank 65 | fill in the blank 66 | fill in the blank 67 | fill in the blank 68 | |
| 31 | Cooking Dept., 15,800 units at $5.6 | fill in the blank 69 | fill in the blank 70 | fill in the blank 71 | fill in the blank 72 | |
| 31 | Direct labor | fill in the blank 73 | fill in the blank 74 | fill in the blank 75 | fill in the blank 76 | |
| 31 | Factory overhead | fill in the blank 77 | fill in the blank 78 | fill in the blank 79 | fill in the blank 80 | |
| 31 | Finished goods | fill in the blank 81 | fill in the blank 82 | fill in the blank 83 | fill in the blank 84 | |
| 31 | Bal., 800 units, 80% completed | fill in the blank 85 | fill in the blank 86 | fill in the blank 87 | fill in the blank 88 |
If an amount box does not require an entry, leave it blank. Round cost per unit answers to the nearest cent.
| Hearty Soup Co. Cost of Production Report-Filling Department For the Month Ended May 31 |
|||
|---|---|---|---|
| Whole Units | Equivalent Units | ||
| Units | Direct Materials (a) | Conversion (a) | |
| Units charged to production: | |||
| Inventory in process, May 1 | fill in the blank 89 | ||
| Received from Cooking Department | fill in the blank 90 | ||
| Total units accounted for by the Filling Department | fill in the blank 91 | ||
| Units to be assigned costs: | |||
| Inventory in process, May 1 | fill in the blank 92 | fill in the blank 93 | fill in the blank 94 |
| Started and completed in May | fill in the blank 95 | fill in the blank 96 | fill in the blank 97 |
| Transferred to finished goods in May | fill in the blank 98 | fill in the blank 99 | fill in the blank 100 |
| Inventory in process, May 31 | fill in the blank 101 | fill in the blank 102 | fill in the blank 103 |
| Total units to be assigned costs | fill in the blank 104 | fill in the blank 105 | fill in the blank 106 |
| Costs | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Costs | Direct Materials | Conversion | Total | |||||||||
| Costs per equivalent unit: | ||||||||||||
| Total costs for May in Filling Department | $fill in the blank 107 | $fill in the blank 108 | ||||||||||
| Total equivalent units | fill in the blank 109 | fill in the blank 110 | ||||||||||
| Cost per equivalent unit (b) | $fill in the blank 111 | $fill in the blank 112 | ||||||||||
| Costs charged to production: | ||||||||||||
| Inventory in process, May 1 | $fill in the blank 113 | |||||||||||
| Costs incurred in May | fill in the blank 114 | |||||||||||
| Total costs accounted for by the Filling Department | $fill in the blank 115 | |||||||||||
| Cost allocated to completed and partially completed units: | ||||||||||||
| Inventory in process, May 1 balance (c) | $fill in the blank 116 | |||||||||||
| To complete inventory in process, May 1 (c) | $fill in the blank 117 | $fill in the blank 118 | fill in the blank 119 | |||||||||
| Cost of completed May 1 work in process | $fill in the blank 120 | |||||||||||
| Started and completed in May (c) | fill in the blank 121 | fill in the blank 122 | fill in the blank 123 | |||||||||
| Transferred to finished goods in May (c) | $fill in the blank 124 | |||||||||||
| Inventory in process, May 31 (d) | fill in the blank 125 | fill in the blank 126 | fill in the blank 127 | |||||||||
| Total costs assigned by the Filling Department | $fill in the blank 128 |
3. The cost per equivalent unit for direct materials from March to May. The cost per equivalent unit for conversion costs from March to May. These changes be investigated for their underlying causes, and any necessary corrective actions should be taken.
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