Glencove Company makes one model of radar gun used by law enforcement officers. All direct materials are added at the beginning of the manufacturing process. Information for the month of September follows: Units Costs Beginning work in process (40% complete) ? Direct materials $ 1,341,500 Conversion cost 630,800 Total cost of beginning work in process $ 1,972,300 Number of units started 36,900 Number of units completed and transferred to finished goods 35,300 Ending work in process (75% complete) 22,350 Current period costs Direct materials $ 2,407,400 Conversion cost 1,271,500 Total current period costs $ 3,678,900 Required: 1. Using FIFO method of process costing, complete each of the following steps: Reconcile the number of physical units worked on during the period. Calculate the number of equivalent units. Calculate the cost per equivalent unit.
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.
Glencove Company makes one model of radar gun used by law enforcement officers. All direct materials are added at the beginning of the manufacturing process. Information for the month of September follows:
| Units | Costs | |
|---|---|---|
| Beginning work in process (40% complete) | ? | |
| Direct materials | $ 1,341,500 | |
| Conversion cost | 630,800 | |
| Total cost of beginning work in process | $ 1,972,300 | |
| Number of units started | 36,900 | |
| Number of units completed and transferred to finished goods | 35,300 | |
| Ending work in process (75% complete) | 22,350 | |
| Current period costs | ||
| Direct materials | $ 2,407,400 | |
| Conversion cost | 1,271,500 | |
| Total current period costs | $ 3,678,900 |
Required:
1. Using FIFO method of
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Reconcile the number of physical units worked on during the period.
-
Calculate the number of equivalent units.
-
Calculate the cost per equivalent unit.
-
Reconcile the total cost of work in process.
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