Question a Vaasa Chemicals makes a product by way of two processes - Mixing & Refining. Its process costing system in the Miing Department has two direct cost categories (Chemical P& Chemical Q) and one comversion costs pool Chemical P is introduced at the start of the operations in the Miring Department and Chemical Q is added when the product is three- fourths (750) completed in the Micing Department. The following information pertains to the Mixing department for fuly: Units Work in process inventory. ſuly : Started production Completed and transferred to Refining Department Ending work in process inventory (two-thirds (60ojof the way through the Mixing process 50.000 35,000 15,000 Costs Beginning WIP inventory So Costs added during July- Chemical P Chemical Q Direct Labour Manufacturing overhead 250.000 70,000 32.000 203.000 Required: i) Compute the equivalent units in the Mixing Department for direct materials and for conversion costs ü) Compute: a) the cost of the units completed and transferred out to the Refining Department b) the cost of work in process inventory as of july 3 i) Prepare the journal entry to record the cost of the units completed and transferred out to the Refining Department. iv) Post the journal entries to the Work in Process Inventory- Micing T-account. What is the ending balance
Question a Vaasa Chemicals makes a product by way of two processes - Mixing & Refining. Its process costing system in the Miing Department has two direct cost categories (Chemical P& Chemical Q) and one comversion costs pool Chemical P is introduced at the start of the operations in the Miring Department and Chemical Q is added when the product is three- fourths (750) completed in the Micing Department. The following information pertains to the Mixing department for fuly: Units Work in process inventory. ſuly : Started production Completed and transferred to Refining Department Ending work in process inventory (two-thirds (60ojof the way through the Mixing process 50.000 35,000 15,000 Costs Beginning WIP inventory So Costs added during July- Chemical P Chemical Q Direct Labour Manufacturing overhead 250.000 70,000 32.000 203.000 Required: i) Compute the equivalent units in the Mixing Department for direct materials and for conversion costs ü) Compute: a) the cost of the units completed and transferred out to the Refining Department b) the cost of work in process inventory as of july 3 i) Prepare the journal entry to record the cost of the units completed and transferred out to the Refining Department. iv) Post the journal entries to the Work in Process Inventory- Micing T-account. What is the ending balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
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Transcribed Image Text:Question :
Vaasa Chemicals makes a product by way of two processes - Mixing & Refining. Its process
costing system in the Misdng Department has two direct cost categories (Chemical P &
Chemical Q) and one conversion costs pool. Chemical P is introduced at the start of the
operations in the Mixing Department and Chemical Q is added when the product is three-
fourths (75%6) completed in the Mixing Department. The following information pertains to the
Mixing department for July:
Units
Work in process inventory. july :
Started production
Completed and transferred to Refining Department
Ending work in process inventory [two-thirds (660)of the way through
the Mixing process
50,000
35,000
15,000
Costs
Beginning WIP inventory
So
Costs added during July:
Chemical P
Chemical Q
Direct Labour
Manufacturing overhead
250,000
70,000
32,000
103.000
Required:
i)
Compute the equivalent units in the Mixing Department for direct materials and for
conversion costs
ü)
Compute :
a) the cost of the units completed and transferred out to the Refining Department
b) the cost of work in process inventory as of july 31
iii)
Prepare the joumal entry to record the cost of the units completed and transferred out
to the Refining Department.
iv)
Post the journal entries to the Work in Process Inventory - Mixing T-account. What is
the ending balance
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