Preparing a production cost report, no beginning WIP or costs transferred in Dee Electronics makes game consoles in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no Work-in-Process Inventory on October 31. In mid-November, Dee Electronics started production on 100,000 game consoles. Of this number, 90,000 game consoles were assembled during November and transferred out to the Programming Department. The November 30 Work-in-Process Inventory in the Assembly Department was 35% of the way through the assembly process. Direct materials costing $399,000 were placed in production in Assembly during November, direct labor of $139,000 was assigned, and manufacturing overhead of $130,280 was allocated to that department. Requirements Prepare a production cost report for the Assembly Department for November. The company uses the weighted-average method. Prepare a T-account for Work-in-Process Inventory—Assembly to show its activity during November, including the November 30 balance.
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.
Preparing a production cost report, no beginning WIP or costs transferred in
Dee Electronics makes game consoles in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no Work-in-Process Inventory on October 31. In mid-November, Dee Electronics started production on 100,000 game consoles. Of this number, 90,000 game consoles were assembled during November and transferred out to the Programming Department. The November 30 Work-in-Process Inventory in the Assembly Department was 35% of the way through the assembly process. Direct materials costing $399,000 were placed in production in Assembly during November, direct labor of $139,000 was assigned, and manufacturing overhead of $130,280 was allocated to that department.
Requirements
- Prepare a production cost report for the Assembly Department for November. The company uses the weighted-average method.
- Prepare a T-account for Work-in-Process Inventory—Assembly to show its activity during November, including the November 30 balance.
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