Gladden Dock Company manufactures boat docks on an assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. This problem focuses on the Assembly Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. The firm uses FIFO method and the controller prepared the following (correct) equivalent unit calculation. Units completed Physical Units Direct Materials Conversion WIP, beginning 70 0 52.5 Started and completed 30 30 30 WIP, ending 10 10 5 Totals 110 40 87.5 Cost per Equiv Unit $4,000 $16,000 Work in process, beginning inventory: Current Costs: Direct materials $140,000 Direct materials $ 160,000 Conversion costs $260,000 Conversion costs $1,400,000 Which of the following journal entries properly records the Assembly Department costs transferred to the Finishi
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.
Gladden Dock Company manufactures boat docks on an assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. This problem focuses on the Assembly Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. The firm uses FIFO method and the controller prepared the following (correct) equivalent unit calculation.
| Units completed |
Physical |
Direct Materials |
Conversion |
|
| WIP, beginning | 70 | 0 | 52.5 | |
| Started and completed |
30 | 30 | 30 | |
| WIP, ending | 10 | 10 | 5 | |
| Totals | 110 | 40 | 87.5 | |
|
Cost per Equiv |
$4,000 |
$16,000 |
Work in process, beginning inventory: Current Costs:
Direct materials $140,000 Direct materials $ 160,000
Conversion costs $260,000 Conversion costs $1,400,000
Which of the following
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