Kaagapay Company has the following information for the month of November: Started in process units, 400,000; Work in process, beg, (35% complete) 80,000 units; Normal spoilage, 14,000 units; Abnormal spoilage, 20,000 units; Work in process, end (70% complete), 58,000 units; Completed and transferred out, 388,000 units. Costs incurred last month were: Materials, P60,000; Conversion costs, P40,000. All materials are added at the start of the production process. The company inspects goods at 75% completion as to conversion costs. The costs per EUP for materials and conversion costs are P1 and P1.50 respectively. What is the cost assigned to normal spoilage, using the weighted average and where is it assigned? a. P29,750 to transferred out units b. P29,750 to transferred out units and ending work in process. c. P35,000 to transferred out units d. P35,000 to transferred out units and ending work in process.
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.
Kaagapay Company has the following information for the month of November: Started in process units, 400,000; Work in process, beg, (35% complete) 80,000 units; Normal spoilage, 14,000 units; Abnormal spoilage, 20,000 units; Work in process, end (70% complete), 58,000 units; Completed and transferred out, 388,000 units. Costs incurred last month were: Materials, P60,000; Conversion costs, P40,000. All materials are added at the start of the production process. The company inspects goods at 75% completion as to conversion costs. The costs per EUP for materials and conversion costs are P1 and P1.50 respectively. What is the cost assigned to normal spoilage, using the weighted average and where is it assigned?
a. P29,750 to transferred out units
b. P29,750 to transferred out units and ending work in process.
c. P35,000 to transferred out units
d. P35,000 to transferred out units and ending work in process.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
