Jennie Electric manufactures several products, including an electric garage door opener called the Door Magic. Door Magics are completely processed in one department and are then transferred to the finished goods warehouse. All manufacturing costs are applied to Door Magic units at a uniform rate throughout the production process. The following information is available for July: Summary of Units Beginning Work in Process................................................. 400 Units started.................................................................... 1,800 Units completed and transferred to finished goods............ 1,900 Ending Work in Process (100% complete as to materials and 70% complete as to conversion costs)................ 300 Summary of Costs Beginning Work in Process: (direct materials $4,600, conversion costs $20,220)...... $ 24,820 Manufacturing costs incurred in July: Direct materials ................................................... 53,700 Conversion costs................................................. 89,500 Total costs to account for........................................... $168,020 Instructions:........................................................................... Prepare a cost of production report for the month of July. Prepare the journal entries to record (1) the manufacturing costs charged to the department during July, and (2) the transfer of the completed units to the finished goods warehouse.
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.
Jennie Electric manufactures several products, including an electric garage door opener called the Door Magic. Door Magics are completely processed in one department and are then transferred to the finished goods warehouse. All
Summary of Units
Beginning Work in Process................................................. 400
Units started.................................................................... 1,800
Units completed and transferred to finished goods............ 1,900
Ending Work in Process (100% complete as to materials
and 70% complete as to conversion costs)................ 300
Summary of Costs
Beginning Work in Process:
(direct materials $4,600, conversion costs $20,220)...... $ 24,820
Manufacturing costs incurred in July:
Direct materials ................................................... 53,700
Conversion costs................................................. 89,500
Total costs to account for........................................... $168,020
Instructions:...........................................................................
- Prepare a cost of production report for the month of July.
- Prepare the journal entries to record (1) the manufacturing costs charged to the department during July, and (2) the transfer of the completed units to the finished goods warehouse.
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