Production Report – Barr, Inc. manufactures a product that passes through two processes: mixing and packaging. In the Mixing Department, all materials are added at the beginning of processing and labor and overhead are added uniformly. Information for the Mixing Department for April is as follows: Work in process, April 1st: 5,000 units; 60% complete Direct materials: $20,000 Direct Labor: 24,000 Overhead: 4,000 During April, 80,000 units were begun in the month. The following costs were incurred by the Mixing Department during April: Direct materials: $180,000 Direct labor: 200,000 Overhead: 59,200 On April 30th, 12,000 units that were 10% complete remained in the Mixing Department. Instructions: Using the Average Costing method, complete a Cost of Production Report for the Mixing Department. Round all unit costs to four decimal places and other costs to whole dollars.
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.
Production Report – Barr, Inc. manufactures a product that passes through two processes: mixing and packaging. In the Mixing Department, all materials are added at the beginning of processing and labor and
Information for the Mixing Department for April is as follows:
Work in process, April 1st: 5,000 units; 60% complete
Direct materials: $20,000
Direct Labor: 24,000
Overhead: 4,000
During April, 80,000 units were begun in the month.
The following costs were incurred by the Mixing Department during April:
Direct materials: $180,000
Direct labor: 200,000
Overhead: 59,200
On April 30th, 12,000 units that were 10% complete remained in the Mixing Department.
Instructions:
Using the Average Costing method, complete a Cost of Production Report for the Mixing Department. Round all unit costs to four decimal places and other costs to whole dollars.
Process costing is applied when goods are produced in batches and cost of the ending work-in-process and completed units, has to be determined at end of the reporting period.
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