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: Costs Degree of Completion Work-in-process beginning inventory (12,500 units) Transferred-in from Molding $ 98,000 100 % Direct materials costs 164,400 60 Conversion costs 61,000 40 Work-in-process balance (August 1) $ 323,400 During August, 127,500 units were transferred in from the Molding Department at a cost of $2,142,000 and started in Assembling. The Assembling Department incurred other costs of $1,164,600 in August as follows: August Costs Direct materials costs $ 939,600 Conversion costs 225,000 Total August costs $ 1,164,600 At the end of August, 20,000 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.
Pantanal, Inc., manufactures car seats in a local factory. For costing purposes, it uses a first-in, first-out (FIFO)
| Costs | Degree of Completion | |||||
| Work-in-process beginning inventory (12,500 units) | ||||||
| Transferred-in from Molding | $ | 98,000 | 100 | % | ||
| Direct materials costs | 164,400 | 60 | ||||
| Conversion costs | 61,000 | 40 | ||||
| Work-in-process balance (August 1) | $ | 323,400 | ||||
During August, 127,500 units were transferred in from the Molding Department at a cost of $2,142,000 and started in Assembling. The Assembling Department incurred other costs of $1,164,600 in August as follows:
| August Costs | |||
| Direct materials costs | $ | 939,600 | |
| Conversion costs | 225,000 | ||
| Total August costs | $ | 1,164,600 | |
At the end of August, 20,000 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.)
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