Hatch Company produces a product that passes through three processes: Fabrication, Assembly, and Finishing. All manufacturing costs are added uniformly for all processes. The following information was obtained for the Fabrication Department for June: Work in process, June 1, had 90,000 units (40 percent completed) and the following costs: Direct materials $72,740 Direct labor 107,000 Overhead 35,000 During the month of June, 190,000 units were completed and transferred to the Assembly Department, and the following costs were added to production: Direct materials $226,000 Direct labor 144,000 Overhead 162,000 On June 30, there were 45,000 partially completed units in process. These units were 80 percent complete. Required: Prepare a cost of production report for the Fabrication Department for June using the FIFO method of costing. Round the cost per equivalent unit to the nearest cent. Hatch Company Fabrication Department Production Report for June Unit Information Units to account for: fill in the blank 2 fill in the blank 4 Total units to account for fill in the blank 5 Units accounted for: Physical Flow Equivalent Units fill in the blank 7 fill in the blank 8 fill in the blank 10 fill in the blank 11 fill in the blank 13 fill in the blank 14 Total units accounted for fill in the blank 15 fill in the blank 16 Cost Information Costs to account for: Manufacturing Costs $fill in the blank 18 fill in the blank 20 Total costs to account for $fill in the blank 21 Cost per equivalent unit $fill in the blank 22 Costs accounted for: Units transferred out: Units, beginning work in process: Prior-period costs $fill in the blank 23 Current costs to finish units fill in the blank 24 Units started and completed fill in the blank 25 Total cost transferred out $fill in the blank 26 Units, ending work in process fill in the blank 27 Total costs accounted for $fill in the blank 28
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.
Hatch Company produces a product that passes through three processes: Fabrication, Assembly, and Finishing. All
- Work in process, June 1, had 90,000 units (40 percent completed) and the following costs:
Direct materials $72,740 Direct labor 107,000 Overhead 35,000 - During the month of June, 190,000 units were completed and transferred to the Assembly Department, and the following costs were added to production:
Direct materials $226,000 Direct labor 144,000 Overhead 162,000 - On June 30, there were 45,000 partially completed units in process. These units were 80 percent complete.
Required:
Prepare a cost of production report for the Fabrication Department for June using the FIFO method of costing. Round the cost per equivalent unit to the nearest cent.
| Hatch Company | ||
| Fabrication Department | ||
| Production Report for June | ||
| Unit Information | ||
| Units to account for: | ||
| fill in the blank 2 | ||
| fill in the blank 4 | ||
| Total units to account for | fill in the blank 5 | |
| Units accounted for: | ||
| Physical Flow | Equivalent Units | |
| fill in the blank 7 | fill in the blank 8 | |
| fill in the blank 10 | fill in the blank 11 | |
| fill in the blank 13 | fill in the blank 14 | |
| Total units accounted for | fill in the blank 15 | fill in the blank 16 |
| Cost Information | ||
| Costs to account for: | ||
| Manufacturing Costs | ||
| $fill in the blank 18 | ||
| fill in the blank 20 | ||
| Total costs to account for | $fill in the blank 21 | |
| Cost per equivalent unit | $fill in the blank 22 | |
| Costs accounted for: | ||
| Units transferred out: | ||
| Units, beginning work in process: | ||
| Prior-period costs | $fill in the blank 23 | |
| Current costs to finish units | fill in the blank 24 | |
| Units started and completed | fill in the blank 25 | |
| Total cost transferred out | $fill in the blank 26 | |
| Units, ending work in process | fill in the blank 27 | |
| Total costs accounted for | $fill in the blank 28 |
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