Luke's Diner, a manufacturer of highly caffeinated coffee, used the weighted averag method in its process costing system. Luke's Diner used a traditional costing system in the allocation of its manufacturing overhead (MOH) to production. MOH costs ar allocated to production on the basis of direct labor hours logged during the period. Total estimated MOH for the period was $450,000 and total estimated direct labor hours were 50,000. The following data concerns the operations of the company's first processing department, Coffee Bean Grinding, for August 2000: Beginning work in process Costs in beginning work in process Units started in August Direct product costs added during August Ending work in process 100 bags of coffee beans, 100% complete with respect to direct materials, 10% complete with respect to conversion $78,160 (of this amount, $4,000 is for direct materials) 25,000 bags Direct materials $80,000 Direct labor $198,000* $534,360 $450,360 $5,760 $6,768 400 bags, 75% completed with respect to direct materials, 80% complete with respect to conversion *The wage rate is $10 per hour. What is the amount of conversion costs included in Work in Process for department 1 at the beginning of September? Round all calculations to two decimal places and final answer to the nearest dollar.
Luke's Diner, a manufacturer of highly caffeinated coffee, used the weighted averag method in its process costing system. Luke's Diner used a traditional costing system in the allocation of its manufacturing overhead (MOH) to production. MOH costs ar allocated to production on the basis of direct labor hours logged during the period. Total estimated MOH for the period was $450,000 and total estimated direct labor hours were 50,000. The following data concerns the operations of the company's first processing department, Coffee Bean Grinding, for August 2000: Beginning work in process Costs in beginning work in process Units started in August Direct product costs added during August Ending work in process 100 bags of coffee beans, 100% complete with respect to direct materials, 10% complete with respect to conversion $78,160 (of this amount, $4,000 is for direct materials) 25,000 bags Direct materials $80,000 Direct labor $198,000* $534,360 $450,360 $5,760 $6,768 400 bags, 75% completed with respect to direct materials, 80% complete with respect to conversion *The wage rate is $10 per hour. What is the amount of conversion costs included in Work in Process for department 1 at the beginning of September? Round all calculations to two decimal places and final answer to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
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Concept explainers
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.
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Transcribed Image Text:Luke's Diner, a manufacturer of highly caffeinated coffee, used the weighted average
method in its process costing system. Luke's Diner used a traditional costing system
in the allocation of its manufacturing overhead (MOH) to production. MOH costs are
allocated to production on the basis of direct labor hours logged during the period.
Total estimated MOH for the period was $450,000 and total estimated direct labor
hours were 50,000. The following data concerns the operations of the company's
first processing department, Coffee Bean Grinding, for August 2000:
Beginning work in process
Costs in beginning work in
process
Units started in August
Direct product costs added
during August
Ending work in process
100 bags of coffee beans, 100% complete with respect to direct
materials, 10% complete with respect to conversion
$78,160 (of this amount, $4,000 is for direct materials)
25,000 bags
Direct materials $80,000
Direct labor $198,000*
$534,360
$450,360
$5,760
$6,768
400 bags, 75% completed with respect to direct materials, 80% complete
with respect to conversion
*The wage rate is $10 per hour.
What is the amount of conversion costs included in Work in Process for department
1 at the beginning of September? Round all calculations to two decimal places and
final answer to the nearest dollar.
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Step 1: Introduce to Weighted Average Method
VIEWStep 2: Working for equivalent units for conversion costs
VIEWStep 3: Working for overhead applied during August
VIEWStep 4: Working for conversion cost at beginning and added during August
VIEWStep 5: Working for conversion cost in work in process, September 1
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