Gunnison Company had the following equivalent units schedule and cost information for its Sewing Department for the month of December: Direct Materials Conversion Costs Units started and completed 49,000 49,000 Add: Units in beginning work in process × Percentage complete: 5,000 × 0% direct materials — 5,000 × 50% conversion Costs 2,500 Add: Units in ending work in process × Percentage complete: 13,000 × 100% direct materials 13,000 — 13,000 × 35% conversion Costs — 4,550 Equivalent units of output 62,000 56,050 Costs: Work in process, December 1: Direct Material $25,000 Conversion Costs 5,000 Total work in process $30,000 Current costs: Direct Material $372,000 Conversion Costs 224,200 Total current costs $596,200 Required: 1. Calculate the unit cost for December, using the FIFO method. $fill in the blank 1 per equivalent unit 2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for. Cost of goods transferred out $fill in the blank 2 Cost of EWIP $fill in the blank 3 Cost to account for: BWIP $fill in the blank 4 Current (December) fill in the blank 5 Total $fill in the blank 6 3. What if you were asked for the unit cost from the month of November? Calculate November's unit cost. $fill in the blank 7 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.
Gunnison Company had the following equivalent units schedule and cost information for its Sewing Department for the month of December:
| Direct Materials | Conversion Costs | ||
| Units started and completed | 49,000 | 49,000 | |
| Add: Units in beginning work in process × | |||
| Percentage complete: | |||
| 5,000 × 0% direct materials | — | ||
| 5,000 × 50% conversion Costs | 2,500 | ||
| Add: Units in ending work in process × | |||
| Percentage complete: | |||
| 13,000 × 100% direct materials | 13,000 | — | |
| 13,000 × 35% conversion Costs | — | 4,550 | |
| Equivalent units of output | 62,000 | 56,050 | |
| Costs: | |||
| Work in process, December 1: | |||
| Direct Material | $25,000 | ||
| Conversion Costs | 5,000 | ||
| Total work in process | $30,000 | ||
| Current costs: | |||
| Direct Material | $372,000 | ||
| Conversion Costs | 224,200 | ||
| Total current costs | $596,200 |
Required:
1. Calculate the unit cost for December, using the FIFO method.
$fill in the blank 1 per equivalent unit
2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.
| Cost of goods transferred out | $fill in the blank 2 |
| Cost of EWIP | $fill in the blank 3 |
| Cost to account for: | |
|---|---|
| BWIP | $fill in the blank 4 |
| Current (December) | fill in the blank 5 |
| Total | $fill in the blank 6 |
3. What if you were asked for the unit cost from the month of November? Calculate November's unit cost.
$fill in the blank 7 per equivalent unit
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