Ridgecrest Company manufactures plastic storage crates and has the following information available for the month of April: Work in process, April 1 (100% complete for materials, 40% for conversion) 30,500 units Direct materials $ 47,300 Conversion cost $ 65,300 Number of units started 94,100 units April costs Direct materials $ 134,900 Conversion cost $ 200,900 Work in process, April 30 (100% complete for materials, 20% for conversion) 47,300 units Required: Using the FIFO method of process costing, complete each of the following steps: 1. Reconcile the number of physical units worked on during the period. 2. Calculate the number of equivalent units. 3. Calculate the cost per equivalent unit. 4. Reconcile the total cost of work in process.
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.
Ridgecrest Company manufactures plastic storage crates and has the following information available for the month of April:
| Work in process, April 1 | |||
| (100% complete for materials, 40% for conversion) | 30,500 | units | |
| Direct materials | $ | 47,300 | |
| Conversion cost | $ | 65,300 | |
| Number of units started | 94,100 | units | |
| April costs | |||
| Direct materials | $ | 134,900 | |
| Conversion cost | $ | 200,900 | |
| Work in process, April 30 | |||
| (100% complete for materials, 20% for conversion) | 47,300 | units | |
Required:
Using the FIFO method of
1. Reconcile the number of physical units worked on during the period.
2. Calculate the number of equivalent units.
3. Calculate the cost per equivalent unit.
4. Reconcile the total cost of work in process.
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