Reston Manufacturing Corporation produces a cosmetic product in three consecutive processes. The costs of Department 1 for May 2016 were as follows: Cost of beginning inventory Direct material $4,900 Conversion costs 8,295 Costs added in Department 1 Direct material $147,700 Direct labor 149,275 Manufacturing overhead 101,565 398,540 Department 1 handled the following units during May: Units in process, May 1 2,000 Units started in Department 1 40,000 Units transferred to Department 2 39,000 Units in process, May 31 3,000 On average, the May 1 units were 30% complete. The May 31 units were 60% complete. Materials are added at the beginning of the process, and conversion costs occur evenly throughout the process in Department 1. Reston uses the weighted average method for process costing. Required Prepare the product cost report for Department 1 for May. Round average cost per equivalent unit to four decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number. Reston Manufacturing Corporation Department 1 Flow of Units and Equivalent Units Calculations, May 2016 Equivalent Units % Work Done Direct Materials % Work Done Conversion Costs Complete/Transferred Answer Answer Answer Answer Answer Ending Inventory Answer Answer Answer Answer Answer Total Answer Answer Answer Product Cost Report Direct Materials Conversion Costs Beginning Inventory Answer Answer Answer Current Answer Answer Answer Total Costs to Account For Answer Answer Answer ÷ Total Equivalent Units Answer Answer Average cost / Equivalent unit (round four decimal places) Answer Answer Complete / Transferred: Direct Materials Answer Conversion costs Answer Cost of Goods Manufactured Answer Ending Inventory: Direct Materials Answer Conversion costs Answer Cost of Ending Inventory Answer Total Costs Allocated
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.
Reston Manufacturing Corporation produces a cosmetic product in three consecutive processes. The costs of Department 1 for May 2016 were as follows:
| Cost of beginning inventory | ||
| Direct material | $4,900 | |
| Conversion costs | 8,295 | |
| Costs added in Department 1 | ||
| Direct material | $147,700 | |
| Direct labor | 149,275 | |
| Manufacturing |
101,565 | 398,540 |
Department 1 handled the following units during May:
| Units in process, May 1 | 2,000 |
| Units started in Department 1 | 40,000 |
| Units transferred to Department 2 | 39,000 |
| Units in process, May 31 | 3,000 |
On average, the May 1 units were 30% complete. The May 31 units were 60% complete. Materials are added at the beginning of the process, and conversion costs occur evenly throughout the process in Department 1. Reston uses the weighted average method for
Required
Prepare the product cost report for Department 1 for May.
Round average cost per equivalent unit to four decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.
| Reston Manufacturing Corporation Department 1 Flow of Units and Equivalent Units Calculations, May 2016 |
||||||
|---|---|---|---|---|---|---|
| Equivalent Units | ||||||
| % Work Done |
Direct Materials |
% Work Done |
Conversion Costs |
|||
| Complete/Transferred | Answer | Answer | Answer | Answer | Answer | |
| Ending Inventory | Answer | Answer | Answer | Answer | Answer | |
| Total | Answer | Answer | Answer |
| Product Cost Report | ||||||
|---|---|---|---|---|---|---|
| Direct Materials |
Conversion Costs |
|||||
| Beginning Inventory | Answer | Answer | Answer | |||
| Current | Answer | Answer | Answer | |||
| Total Costs to Account For | Answer | Answer | Answer | |||
| ÷ Total Equivalent Units | Answer | Answer | ||||
| Average cost / Equivalent unit (round four decimal places) | Answer | Answer | ||||
| Complete / Transferred: | ||||||
| Direct Materials | Answer | |||||
| Conversion costs | Answer | |||||
| Cost of Goods Manufactured | Answer | |||||
| Ending Inventory: | ||||||
| Direct Materials | Answer | |||||
| Conversion costs | Answer | |||||
| Cost of Ending Inventory | Answer | |||||
| Total Costs Allocated | Answer |
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