Required information [The following information applies to the questions displayed below.] Victory Company uses weighted average process costing. The company has two production processes. Conversion cost is added evenly throughout each process. Direct materials are added at the beginning of the first process. Additional information for the first process follows. Beginning work in process inventory Units started this period Units completed and transferred out Ending work in process inventory Beginning work in process inventory Direct materials Conversion Costs added this period Direct materials Conversion Total costs to account for Cost per equivalent unit of production Units Total costs + Equivalent units of production (from part 1) Cost per equivalent unit of production 67,000 893,000 770,000 190,000 $ 499,200 88,400 3,340,800 1,679,600 Direct Materials Percent Complete 100% 100% Costs EUP Conversion Percent Complete 80% $ 587,600 2. Compute cost per equivalent unit of production for both direct materials and conversion. 5,020,400 $ 5,608,000 60% Materials Costs EUP Conversion
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.
![!
Required information
[The following information applies to the questions displayed below.]
Victory Company uses weighted average process costing. The company has two production processes.
Conversion cost is added evenly throughout each process. Direct materials are added at the beginning
of the first process. Additional information for the first process follows.
Beginning work in process inventory
Units started this period
Units completed and transferred out
Ending work in process inventory
Beginning work in process inventory
Direct materials
Conversion
Costs added this period
Direct materials
Conversion
Total costs to account for
Cost per equivalent unit of production
Units
Total costs
+ Equivalent units of production (from part 1)
Cost per equivalent unit of production
67,000
893,000
770,000
190,000
$ 499,200
88,400
3,340,800
1,679,600
Direct
Materials
Percent
Complete
100%
100%
Costs
EUP
Conversion
Percent
Complete
80%
$ 587,600
2. Compute cost per equivalent unit of production for both direct materials and conversion.
5,020,400
$ 5,608,000
60%
Materials
Costs
EUP
Conversion](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb5ae4578-9d0d-4369-b6dd-45d14c4c9e30%2Fd279038f-0e58-4f1f-947d-3fa32a06cf6c%2Faubgcad_processed.png&w=3840&q=75)
|
>Process costing includes calculation of Equivalent units and cost per equivalent units. |
|
>This is done using Weighted average or FIFO Method. |
-
|
>Under Weighted Average method, Beginning units are not considered for calculation of equivalent units. |
|
>Also, for calculation of Cost per Equivalent units, the beginning cost is considered. |
Step by step
Solved in 2 steps
