Part 4: Determine the cost per equivalent unit for Conversion Costs using Weighted Average Part 5: Determine the costs transferred out to finished goods during July using Weighted Average
Part 4: Determine the cost per equivalent unit for Conversion Costs using Weighted Average Part 5: Determine the costs transferred out to finished goods during July using Weighted Average
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:July 1, Beginning Work In Process Inventory (18,000 units):
Direct Materials (70% complete)
Conversion Costs (60% complete)
$ 122,400
76,800
Total WIP July 1
$199,200
During July:
Units Started
Units Completed and Transferred Out
Costs incurred during July
Direct Materials
Conversion
$180,000
$288,000
90,000
102,000
July 31, Ending Work in Process Inventory (12,000 units):
Direct Materials (60% complete)
Conversion (50% complete)
Transcribed Image Text:Part 4: Determine the cost per equivalent unit for Conversion Costs using Weighted Average
Part 5: Determine the costs transferred out to finished goods during July using Weighted Average
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Step 1 Introduction
VIEWStep 2 Computation of equivalent units for conversion cost
VIEWStep 3 Calcualtion of Conversion cost per equivalent unit
VIEWStep 4 Computation of equivalent units for Material Cost
VIEWStep 5 Calcualtion of Material cost per equivalent unit
VIEWStep 6 Calculation of cost transferred out during July in relation to finished units
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