How do we go about finding the numbers? Not just pasted in, rather showing the numbers used in solving a specific problem ex. (98,098-6555 =) Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31: ACCOUNT Work in Process—Roasting Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit July 1 Bal., 6,400 units, 4/5 completed 17,024 31 Direct materials, 288,000 units 633,600 650,624 31 Direct labor 136,800 787,424 31 Factory overhead 34,176 821,600 31 Goods transferred, 289,000 units ? 31 Bal., ? units, 1/5 completed ? Required:
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.
How do we go about finding the numbers? Not just pasted in, rather showing the numbers used in solving a specific problem ex. (98,098-6555 =)
Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31:
| ACCOUNT Work in Process—Roasting Department | ACCOUNT NO. | |||||||
| Date | Item | Debit | Credit | Balance | ||||
| Debit | Credit | |||||||
| July | 1 | Bal., 6,400 units, 4/5 completed | 17,024 | |||||
| 31 | Direct materials, 288,000 units | 633,600 | 650,624 | |||||
| 31 | Direct labor | 136,800 | 787,424 | |||||
| 31 | Factory overhead | 34,176 | 821,600 | |||||
| 31 | Goods transferred, 289,000 units | ? | ||||||
| 31 | Bal., ? units, 1/5 completed | ? |
Required:
1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to two decimal places.
| Hana Coffee Company | |||
| Cost of Production Report-Roasting Department | |||
| For the Month Ended July 31 | |||
| Unit Information | |||
| Units charged to production: | |||
| Inventory in process, July 1 | |||
| Received from materials storeroom | |||
| Total units accounted for by the Roasting Department | |||
| Units to be assigned costs: | |||
| Equivalent Units | |||
| Whole Units | Direct Materials | Conversion | |
| Inventory in process, July 1 | |||
| Started and completed in July | |||
| Transferred to Packing Department in July | |||
| Inventory in process, July 31 | |||
| Total units to be assigned costs | |||
| Cost Information | |||
| Cost per equivalent unit: | |||
| Direct Materials | Conversion | ||
| Total costs for July in Roasting Department | $ | $ | |
| Total equivalent units | |||
| Cost per equivalent unit | $ | $ | |
| Costs assigned to production: | |||
| Direct Materials | Conversion | Total | |
| Inventory in process, July 1 | $ | ||
| Costs incurred in July | |||
| Total costs accounted for by the Roasting Department | $ | ||
| Costs allocated to completed and partially completed units: | |||
| Inventory in process, July 1 balance | $ | ||
| To complete inventory in process, July 1 | $ | $ | |
| Cost of completed July 1 work in process | $ | ||
| Started and completed in July | |||
| Transferred to Molding Department in July | $ | ||
| Inventory in process, July 31 | |||
| Total costs assigned by the Roasting Department |
Solution 1:
|
Hana Coffee Company Cost of Production Report-Roasting Department For the Month Ended July 31 |
| Unit Information | |
| Units charged to production: | |
| Inventory in process, July 1 | 6400 |
| Received from materials storeroom | 288,000 |
| Total units accounted for by the Roasting Department | 294,400 |
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