Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below. Direct Materials Conversion Costs Units completed 48,000 48,000 Add: Units in ending work in process × Percentage complete: 14,000 × 100% direct materials 14,000 — 14,000 × 40% conversion materials — 5,600 Eqivalent units of output 62,000 53,600 Costs: Work in process, December 1: Direct materials $66,000 Conversion costs 10,000 Total work in process $76,000 Current costs: Direct materials $540,000 Conversion costs 186,000 Total current costs $726,000 Required: 1. Calculate the unit cost for December, using the weighted average method. Round final answer to the nearest cent. (NOTE: retain unrounded interim amounts for use in part 2.) $fill in the blank 1 per equivalent unit 2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for. Using interim amounts from part 1 (unrounded amounts), compute each amount. Then round only final answers to the nearest dollar. Cost of goods transferred out: Units completed $fill in the blank 2 Cost of EWIP fill in the blank 3 Total costs assigned (accounted for) $fill in the blank 4 Reconciliation Cost to account for: BWIP $fill in the blank 5 Current (December) fill in the blank 6 Total $fill in the blank 7 3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $4.71 ($66,000 / 14,000), and the December unit materials cost is $11.25 ($540,000 / 48,000). The equivalent units in BWIP are 14,000, and the FIFO equivalent units are 48,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output). Round final answer to the nearest cent. $fill in the blank 8 per unit
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.
Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below.
| Direct Materials | Conversion Costs | ||||||
| Units completed | 48,000 | 48,000 | |||||
| Add: Units in ending work in process × | |||||||
| Percentage complete: | |||||||
| 14,000 × 100% direct materials | 14,000 | — | |||||
| 14,000 × 40% conversion materials | — | 5,600 | |||||
| Eqivalent units of output | 62,000 | 53,600 | |||||
| Costs: | |||||||
| Work in process, December 1: | |||||||
| Direct materials | $66,000 | ||||||
| Conversion costs | 10,000 | ||||||
| Total work in process | $76,000 | ||||||
| Current costs: | |||||||
| Direct materials | $540,000 | ||||||
| Conversion costs | 186,000 | ||||||
| Total current costs | $726,000 |
Required:
1. Calculate the unit cost for December, using the weighted average method. Round final answer to the nearest cent. (NOTE: retain unrounded interim amounts for use in part 2.)
$fill in the blank 1 per equivalent unit
2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for. Using interim amounts from part 1 (unrounded amounts), compute each amount. Then round only final answers to the nearest dollar.
Cost of goods transferred out:
| Units completed | $fill in the blank 2 |
| Cost of EWIP | fill in the blank 3 |
| Total costs assigned (accounted for) | $fill in the blank 4 |
Reconciliation
Cost to account for:
| BWIP | $fill in the blank 5 |
| Current (December) | fill in the blank 6 |
| Total | $fill in the blank 7 |
3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $4.71 ($66,000 / 14,000), and the December unit materials cost is $11.25 ($540,000 / 48,000). The equivalent units in BWIP are 14,000, and the FIFO equivalent units are 48,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output). Round final answer to the nearest cent.
$fill in the blank 8 per unit
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