OBJECTIVE 6 6 Exercise 6.22 Weighted Average Method, Equivalent Units, Unit Cost, Multiple Departments Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments. The second department (Polishing) had the following physical flow schedule for December: Units to account for: Units, beginning work in process Units started 4,000 (40% complete) Total units to account for Units accounted for: Units, ending work in process Units completed Units accounted for 8,000 (50% complete) Costs in beginning work in process for the Polishing Department were direct materials, $5,000; conversion costs, S6,000; and transferred in, $8,000. Costs added during the month: direct mate- rials, $32,000; conversion costs, $50,000; and transferred in, $40,000. (continued) Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-202 Chapter 6 Process Costing Required: 1. Assuming the use of the weighted average method, prepare a schedule of equivalent units. 2. Compute the unit cost for the month.
OBJECTIVE 6 6 Exercise 6.22 Weighted Average Method, Equivalent Units, Unit Cost, Multiple Departments Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments. The second department (Polishing) had the following physical flow schedule for December: Units to account for: Units, beginning work in process Units started 4,000 (40% complete) Total units to account for Units accounted for: Units, ending work in process Units completed Units accounted for 8,000 (50% complete) Costs in beginning work in process for the Polishing Department were direct materials, $5,000; conversion costs, S6,000; and transferred in, $8,000. Costs added during the month: direct mate- rials, $32,000; conversion costs, $50,000; and transferred in, $40,000. (continued) Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-202 Chapter 6 Process Costing Required: 1. Assuming the use of the weighted average method, prepare a schedule of equivalent units. 2. Compute the unit cost for the month.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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:OBJECTIVE 6 6
Exercise 6.22 Weighted Average Method, Equivalent Units, Unit Cost, Multiple
Departments
Fordman Company has a product that passes through two processes: Grinding and Polishing.
During December, the Grinding Department transferred 20,000 units to the Polishing
Department. The cost of the units transferred into the second department was $40,000. Direct
materials are added uniformly in the second process. Units are measured the same way in both
departments.
The second department (Polishing) had the following physical flow schedule for December:
Units to account for:
Units, beginning work in process
Units started
4,000 (40% complete)
Total units to account for
Units accounted for:
Units, ending work in process
Units completed
Units accounted for
8,000 (50% complete)
Costs in beginning work in process for the Polishing Department were direct materials, $5,000;
conversion costs, S6,000; and transferred in, $8,000. Costs added during the month: direct mate-
rials, $32,000; conversion costs, $50,000; and transferred in, $40,000.
(continued)
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-202
Chapter 6 Process Costing
Required:
1. Assuming the use of the weighted average method, prepare a schedule of equivalent units.
2. Compute the unit cost for the month.
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