Lansing, Inc. provides the following information for one of its department’s operations for June (no new material is added in Department T). WIP inventory—Department T Beginning inventory ((7,600 units, 25% complete with respect to Department T costs) Transferred-in costs (from Department S) $ 28,630 Department T conversion costs 9,924 Current work (17,700 units started) Prior department costs 72,570 Department T costs 145,340 The ending inventory has 2,600 units, which are 60 percent complete with respect to Department T costs and 100 percent complete for prior department costs. Required: a. Complete the production cost report using the weighted-average method
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.
Lansing, Inc. provides the following information for one of its department’s operations for June (no new material is added in Department T).
| WIP inventory—Department T | ||
| Beginning inventory ((7,600 units, 25% complete with respect to Department T costs) | ||
| Transferred-in costs (from Department S) | $ | 28,630 |
| Department T conversion costs | 9,924 | |
| Current work (17,700 units started) | ||
| Prior department costs | 72,570 | |
| Department T costs | 145,340 | |
The ending inventory has 2,600 units, which are 60 percent complete with respect to Department T costs and 100 percent complete for prior department costs.
Required:
a. Complete the production cost report using the weighted-average method
Ferdon Watches, Inc., makes four models of watches, Gag-Gift, Commuter, Sport, and Retirement. Ferdon manufactures the watches in four departments: Assembly, Polishing, Special Finishing, and Packaging. All four models are started in Assembly where all material is assembled. The Gag-Gift is transferred to Packaging, where it is packaged and transferred to finished goods inventory. The Commuter and Sport are assembled, then transferred to Polishing. Once the polishing process is completed, they are transferred to Packaging and then finished goods. The Retirement model is assembled and then transferred to Special Finishing, and then Packaging. When packaged, it is transferred to finished goods.
Data for October are shown in the following table. Conversion costs are allocated based on the number of units processed in each department.
| Total | Gag-Gift (8,400 units) |
Commuter (13,400 units) |
Sport (19,800 units) |
Retirement (5,400 units) |
|||||||||||
| Materials | $ | 513,200 | $ | 21,000 | $ | 134,000 | $ | 277,200 | $ | 81,000 | |||||
| Conversion costs: | |||||||||||||||
| Assembly | $ | 235,000 | |||||||||||||
| Polishing | 132,800 | ||||||||||||||
| Special Finishing | 59,400 | ||||||||||||||
| Packaging | 188,000 | ||||||||||||||
| Total conversion costs | $ | 615,200 | |||||||||||||
Required:
b. What is the cost per unit transferred to finished goods inventory for each of the four watches in October?
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