Lawrence Company's Process Costing for the Month Ended August 31, 2017 Units Direct Materials Conversion Costs Standard cost per unit 2$ 5.75 12.25 15,000 $ 86,250 $ 55,125 Work in process, beginning inventory (Aug. 1) Degree of completion of beginning work in process Started in August Completed and transferred out Work in process, ending inventory (Aug. 31) Degree of completion of ending work in process Total costs added during August 100% 30% 100,000 95,000 20,000 100% 80% $569,000 $1,307,240 1. Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule. 2. Compute the total standard costs of handles transferred out in August and the total standard costs of the August 31 inventory of work in process. 3. Compute the total August variances for direct materials and conversion costs. 4. Prepare summarized journal entries to record both the actual costs and standard costs for direct materials and conversion costs, including the variances for both production costs. 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.
Standard-costing with beginning and ending work in process. Lawrence Company is a manufacturer of contemporary door handles. The vice president of Design attends home shows twice a year so the company can keep current with home trends. Because of its volume, Lawrence uses
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