PHYSICAL FLOW, EQUIVALENT UNITS, UNIT COSTS, NO BEGINNING WIP INVENTORY, ACTIVITY-BASED COSTING Mizukawa, Inc., produces a subassembly used in the production of hydraulic cylinders. The subassemblies are produced in three departments: plate cutting, rod cutting, and welding. Overhead is applied using the following drivers and activity rates: Driver Rate Actual Usage (by Plate Cutting) Direct labor cost 150% of direct labor cost $366,000 Inspection hours $20 per hour 3,725 hours Purchase orders $500 per order 400 orders Other data for the plate cutting department are as follows: Beginning work in process — Units started 370,000 Direct materials cost $1,850,000 Units, ending work in process (100% materials; 80% conversion) 20,000 Required: 1. Prepare a physical flow schedule. 2. Calculate equivalent units of production for: a. Direct materials b. Conversion costs 3. Calculate unit costs for: a. Direct materials b. Conversion costs c. Total manufacturing 4. Provide the following information: a. The total cost of units transferred out b. The journal entry for transferring costs from plate cutting to welding c. The cost assigned to units in ending inventory
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.
PHYSICAL FLOW, EQUIVALENT UNITS, UNIT COSTS, NO
BEGINNING WIP INVENTORY, ACTIVITY-BASED COSTING
Mizukawa, Inc., produces a subassembly used in the production of hydraulic cylinders.
The subassemblies are produced in three departments: plate cutting, rod cutting, and
welding.
Driver Rate Actual Usage (by Plate Cutting)
Direct labor cost 150% of direct labor cost $366,000
Inspection hours $20 per hour 3,725 hours
Purchase orders $500 per order 400 orders
Other data for the plate cutting department are as follows:
Beginning work in process —
Units started 370,000
Direct materials cost $1,850,000
Units, ending work in process
(100% materials; 80% conversion) 20,000
Required:
1. Prepare a physical flow schedule.
2. Calculate equivalent units of production for:
a. Direct materials
b. Conversion costs
3. Calculate unit costs for:
a. Direct materials
b. Conversion costs
c. Total manufacturing
4. Provide the following information:
a. The total cost of units transferred out
b. The
c. The cost assigned to units in ending inventory
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