Materials are added at the beginning of the production process at Campo Company. The following information on the physical flow of units is available for the month of November. Beginning work in process (70% complete) 90,000 Started in November 1,020,000 Completed in November and transferred out 960,000 Ending work in process (40% complete) 150,000
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.
Exercise 8-31 (Static) Compute Equivalent Units and Cost per Equivalent Unit: Weighted-Average Method. (LO 8-1, 5)
Materials are added at the beginning of the production process at Campo Company. The following information on the physical flow of units is available for the month of November.
| Beginning work in process (70% complete) | 90,000 | |
| Started in November | 1,020,000 | |
| Completed in November and transferred out | 960,000 | |
| Ending work in process (40% complete) | 150,000 | |
Cost data for November show the following.
| Beginning WIP inventory | |||
| Direct materials costs | $ | 35,670 | |
| Conversion costs | 110,630 | ||
| Current period costs | |||
| Direct materials costs | $ | 408,330 | |
| Conversion costs | 1,521,370 | ||
Required:
a. Compute the cost equivalent units for the conversion cost calculation assuming Campo uses the weighted-average method.
b. Compute the cost per equivalent unit for materials and conversion costs for November.
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