Georgia Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 500 units. The costs and percentage completion of these units in beginning inventory were: cost percent complete materials costs $8,400 65% conversion costs $13,700 55% A total of 6,400 units were started and 5,800 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Materials costs $142,100 Conversion costs $271,000 The ending inventory was 85% complete with respect to materials and 50% complete with respect to conversion costs. What are the equivalent units for materials for the month in the first processing department? 935 6,735 6,900 5,800
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.
Georgia Corporation uses the weighted-average method in its
| cost | percent complete | |
| materials costs | $8,400 | 65% |
| conversion costs | $13,700 | 55% |
A total of 6,400 units were started and 5,800 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
| Materials costs | $142,100 |
| Conversion costs | $271,000 |
The ending inventory was 85% complete with respect to materials and 50% complete with respect to conversion costs.
What are the equivalent units for materials for the month in the first processing department?
First, compute the units in ending work in process as shown below:
Units in ending work in process = Beginning work in process + Units started - Units transferred
Units in ending work in process = 500 + 6,400 - 5,800
Units in ending work in process = 1,100 units
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