Molding Assembly Beginning inventories: Physical units Costs: 10,000 8,000 Transferred in $ 45,200 S 22,000 $ 13,800 Direct materials Conversion costs $ 16,800 Current production: Units started 25,000 30,000 Units transferred out 35,000 Costs: Transferred in ? $ 56,250 $103,500 S 39,550 $136,500 Direct materials Conversion costs Percentage of completion: Beginning inventory Ending inventory 40% 50% 80 50
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.
Muskoge Company uses a process-costing system. The company
manufactures a product that is processed in two departments: Molding
and Assembly. In the Molding Department, direct materials are added at
the beginning of the process; in the Assembly Department, additional
direct materials are added at the end of the process. In both
departments, conversion costs are incurred uniformly throughout the
process. As work is completed, it is transferred out. The following table
summarizes the production activity and costs for February:
Required:
1. Using the weighted average method, prepare the following for
the Molding Department:
a. A physical flow schedule
b. An equivalent units calculation
c. Calculation of unit costs. Round to four decimal places.
d. Cost of ending work in process and cost of goods transferred out
e. A cost reconciliation
2. Prepare
costs for the Molding Department. Materials are added at the
beginning of the process.
3. Repeat Requirements 1 and 2 for the Assembly Department.
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