Mercier Manufacturing produces a plastic part in three sequential departments: Extruding, Fabricating, and Packaging. Mercier uses the weighted-average process costing method to account for costs of production in all three departments. The following information was obtained for the Fabricating Department for the month of September. Work in process on September 1 had 15,000 units made up of the following:
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.
Mercier Manufacturing produces a plastic part in three sequential departments: Extruding, Fabricating, and Packaging. Mercier uses the weighted-average
Work in process on September 1 had 15,000 units made up of the following:
| Amount | Degree of Completion | |
|---|---|---|
| Prior department costs transferred in from the Extruding Department | $ 80,250 | 100% |
| Costs added by the Fabricating Department | ||
| Direct materials | $ 40,500 | 90% |
| Direct labor | 10,200 | 70% |
| Manufacturing |
9,420 | 35% |
| $ 60,120 | ||
| Work in process, September 1 | $ 140,370 |
During September, 75,000 units were transferred in from the Extruding Department at a cost of $446,250. The Fabricating Department added the following costs:
| Direct materials | $ 214,200 |
|---|---|
| Direct labor | 64,800 |
| Manufacturing overhead | 34,380 |
| Total costs added | $ 313,380 |
Fabricating finished 60,000 units and transferred them to the Packaging Department.
At September 30, 30,000 units were still in work-in-process inventory. The degree of completion of work-in-process inventory at September 30 was as follows:
| Direct materials | 100% |
|---|---|
| Direct labor | 60 |
| Manufacturing overhead | 50 |
Required:
a. Prepare a production cost report for September using the weighted-average method.
Note: Round "Cost per equivalent unit" to 2 decimal places. Round your final answers to nearest whole number.
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