Glenda Manufacturing Company applies process costing in the manufacture of its sole product, "Pharmanex". Manufacturing starts in Department 1 where materials are all added at the start of the processing. The good units are then transferred to Department 2 where all the incremental materials needed for its completion are added after final inspection. In Department I, units are inspected at the end of the processing while in Department 2, inspection takes place when the units are 90% completed. Department 1 uses FIFO costing while Department 2 uses weighted average costing. The production data for the month of August show the following: Department 1 Department 2 UNITS Beginning Work in Process, Aug 20,000 10,000 1 Work to be done 80% 20% Ending Work in Process, Aug 31 30,000 17,500 Work Completed Started in Process during August 2/3 5/7 150,000 Normal Spoilage 4% of units started in 2,500 process Abnormal Spoilage ¼ of normal spoilage 1,250 COST Work in Process, Aug 1: Transferred In 285,450 Materials 135,000 214,875 Conversion Cost 97,500 280,725 Current Costs: Transferred In Materials 1,980,000 840,000 Conversion Cost 3,088,800 1,282,500 22. What are the total costs transferred to Department 2 and the amount of work in-process, end in Department 1, respectively? a. 4,227,300 ; 792,000 b. 4,459,800; 792,000 C. 4,261,800; 396,000 d. 4,459,800 ; 549,300 23. What is the total costs transferred to the Storeroom and the amount of work in-process, end in Department 2, respectively? a. 6,583,650; 725,250 b. 6,474,750 ; 582,750 c. 6,474,750 ; 725,250 d. 6,583,650 ; 582,750
Glenda Manufacturing Company applies process costing in the manufacture of its sole product, "Pharmanex". Manufacturing starts in Department 1 where materials are all added at the start of the processing. The good units are then transferred to Department 2 where all the incremental materials needed for its completion are added after final inspection. In Department I, units are inspected at the end of the processing while in Department 2, inspection takes place when the units are 90% completed. Department 1 uses FIFO costing while Department 2 uses weighted average costing. The production data for the month of August show the following: Department 1 Department 2 UNITS Beginning Work in Process, Aug 20,000 10,000 1 Work to be done 80% 20% Ending Work in Process, Aug 31 30,000 17,500 Work Completed Started in Process during August 2/3 5/7 150,000 Normal Spoilage 4% of units started in 2,500 process Abnormal Spoilage ¼ of normal spoilage 1,250 COST Work in Process, Aug 1: Transferred In 285,450 Materials 135,000 214,875 Conversion Cost 97,500 280,725 Current Costs: Transferred In Materials 1,980,000 840,000 Conversion Cost 3,088,800 1,282,500 22. What are the total costs transferred to Department 2 and the amount of work in-process, end in Department 1, respectively? a. 4,227,300 ; 792,000 b. 4,459,800; 792,000 C. 4,261,800; 396,000 d. 4,459,800 ; 549,300 23. What is the total costs transferred to the Storeroom and the amount of work in-process, end in Department 2, respectively? a. 6,583,650; 725,250 b. 6,474,750 ; 582,750 c. 6,474,750 ; 725,250 d. 6,583,650 ; 582,750
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
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Question
Transcribed Image Text:Glenda Manufacturing Company applies process costing in the manufacture of its sole product,
"Pharmanex".
Manufacturing starts in Department 1 where materials are all added at the start of the processing.
The good units are then transferred to Department 2 where all the incremental materials needed
for its completion are added after final inspection.
In Department I, units are inspected at the end of the processing while in Department 2,
inspection takes place when the units are 90% completed.
Department 1 uses FIFO costing while Department 2 uses weighted average costing.
The production data for the month of August show the following:
Department 1
Department 2
UNITS
Beginning Work in Process, Aug
20,000
10,000
1
Work to be done
80%
20%
Ending Work in Process, Aug 31
Work Completed
Started in Process during August
30,000
17,500
2/3
5/7
150,000
Normal Spoilage
4% of units started in
2,500
process
Abnormal Spoilage
4 of normal spoilage
1,250
COT
Work in Process, Aug 1:
Transferred In
285,450
Materials
135,000
214,875
Conversion Cost
97,500
280,725
Current Costs:
Transferred In
Materials
1,980,000
840,000
Conversion Cost
3,088,800
1,282,500
22. What are the total costs transferred to Department 2 and the amount of work in-process, end in
Department 1, respectively?
a. 4,227,300 ; 792,000
b. 4,459,800; 792,000
C.
4,261,800 ; 396,000
d. 4,459,800 ; 549,300
23. What is the total costs transferred to the Storeroom and the amount of work in-process, end in
Department 2, respectively?
a. 6,583,650 ; 725,250
b. 6,474,750 ; 582,750
C. 6,474,750 ; 725,250
d. 6,583,650 ; 582,750
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