REFRESHING WATER COMPANY Work-in-Process Inventory-Bottling Month Ended March 31, 2013 Dollars Transforred In Direct Materials Direct Labor Total Costs Units Manufacturing Overhead $ 330 Beginning inventory. Mar. 1 (40% complete) Production started Transferied out 15,000 160,000 $ 1,400 135,100 $ 2,430 214,900 $ 30,400 700 33,100 16,300 152,000 23,000 Ending inventory, Mar. 31 (70% complete)
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 production cost report, journalizing, second department
Refreshing Water Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process. Costs in beginning Work-in-Process Inventory include transferred in costs of $1,400, direct labor of $700, and manufacturing overhead of $330. March data for the Bottling Department follow:
Requirements
- Prepare a production cost report for the Bottling Department for the month of March. The company uses the weighted-average method.
- Prepare the
journal entry to record the cost of units completed and transferred out. Post all transactions to the Work-in-Process Inventory Bottling T-account. What is the ending balance?
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