Miller Outdoor Equipment (MOE) makes four models of tents. The model names are Rookie, Novice, Hiker, and Expert. MOE manufactures the tents in two departments: Stitching and Customizing. All four models are processed initially in Stitching where all material is assembled and sewn into a basic tent. The Rookie model is then transferred to finished goods. After processing in Stitching the other three models are transferred to Customizing for additional add-ons, and then transferred to finished goods. There were no beginning work-in-process inventories on August 1. Data for August are shown in the following table. Ending work in process is 40 percent complete in Stitching and 60 percent complete in Customizing. Conversion costs are allocated based on the number of equivalent units processed in each department. Units started Units completed in Stitching Units completed in Customizing Materials Conversion costs: Stitching Customizing Total conversion costs Total Rookie Novice Expert 800 480 450 150 745 445 405 80 430 390 65 $64,440 $24,000 $18,240 $15,750 $6,450 $57,260 25,000 $82,260 Hiker Required: a. What is the unit cost of each model transferred to finished goods in August? b. What is the balance of the Work-in-Process Inventory on August 31 for Stitching? For Customizing?
Miller Outdoor Equipment (MOE) makes four models of tents. The model names are Rookie, Novice, Hiker, and Expert. MOE manufactures the tents in two departments: Stitching and Customizing. All four models are processed initially in Stitching where all material is assembled and sewn into a basic tent. The Rookie model is then transferred to finished goods. After processing in Stitching the other three models are transferred to Customizing for additional add-ons, and then transferred to finished goods. There were no beginning work-in-process inventories on August 1. Data for August are shown in the following table. Ending work in process is 40 percent complete in Stitching and 60 percent complete in Customizing. Conversion costs are allocated based on the number of equivalent units processed in each department. Units started Units completed in Stitching Units completed in Customizing Materials Conversion costs: Stitching Customizing Total conversion costs Total Rookie Novice Expert 800 480 450 150 745 445 405 80 430 390 65 $64,440 $24,000 $18,240 $15,750 $6,450 $57,260 25,000 $82,260 Hiker Required: a. What is the unit cost of each model transferred to finished goods in August? b. What is the balance of the Work-in-Process Inventory on August 31 for Stitching? For Customizing?
Chapter1: Financial Statements And Business Decisions
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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:Miller Outdoor Equipment (MOE) makes four models of tents. The model names are Rookie, Novice, Hiker, and Expert. MOE
manufactures the tents in two departments: Stitching and Customizing. All four models are processed initially in Stitching where all
material is assembled and sewn into a basic tent. The Rookie model is then transferred to finished goods. After processing in Stitching,
the other three models are transferred to Customizing for additional add-ons, and then transferred to finished goods.
There were no beginning work-in-process inventories on August 1. Data for August are shown in the following table. Ending work in
process is 40 percent complete in Stitching and 60 percent complete in Customizing. Conversion costs are allocated based on the
number of equivalent units processed in each department.
Units started
Units completed in Stitching
Units completed in Customizing
Materials
Conversion costs:
Stitching
Customizing
Total conversion costs
Total Rookie Novice
480
450
445
405
430
390
$64,440 $24,000 $18,240 $15,750 $6,450
$57,260
25,000
$82,260
800
745
Hiker
Expert
150
80
65
Required:
a. What is the unit cost of each model transferred to finished goods in August?
b. What is the balance of the Work-in-Process Inventory on August 31 for Stitching? For Customizing?
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