Pantanal, Inc., manufactures car seats in a local factory. For costing purposes, it uses a first-in, first-out (FIFO) process costing system. The factory has three departments: Molding, Assembling, and Finishing. Following is information on the beginning work-in-process inventory in the Assembling Department on August 1: Work-in-process beginning inventory (12,000 units) Transferred-in from Molding Direct materials costs Conversion costs Work-in-process balance (August 1) Direct materials costs Conversion costs Total August costs Costs During August, 98,000 units were transferred in from the Molding Department at a cost of $2,028,600 and started in Assembling. The Assembling Department incurred other costs of $964,935 in August as follows: August Costs $782,340 182,595 $964,935 $ 98,000 163,000 62,000 $323,000 Cost of goods transferred out Cost of WIP ending inventory Degree of Completion 100% 70 40 At the end of August, 13,000 units remained in inventory that were 90 percent complete with respect to direct materials and 50 percent complete with respect to conversion. Required: Compute the cost of goods transferred out in August and the cost of work-in-process ending inventory. (Do not round intermediate calculations.)
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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