Seempleylungs Company operates three producing departments – Cutting, Sewing and Finishing. In November, the Sewing department transferred 6,200 units to Finishing and had 400 units in process at the end of the month. The Sewing department work in process inventory as of October 31 were 1,200 units. These units were one-fourth incomplete as of that date, with a cost of P13,312. Out of this total amount, 40% was materials cost, while the cost of labor was 1/3 of conversion cost. The units started in the Sewing department during November were received from the preceding department at a cost of P47,595.60. For the same month, the sewing department incurred P11,772 for materials, P15,660 for labor and P2,268 for overhead. As of the end of the month, the department has done one quarter of the work required to complete the units in process. REQUIREMENT: Compute for the cost of units transferred to the Finishing department.
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.
| Seempleylungs Company operates three producing departments – Cutting, Sewing and Finishing. In November, the Sewing department transferred 6,200 units to Finishing and had 400 units in process at the end of the month. The Sewing department work in process inventory as of October 31 were 1,200 units. These units were one-fourth incomplete as of that date, with a cost of P13,312. Out of this total amount, 40% was materials cost, while the cost of labor was 1/3 of conversion cost. The units started in the Sewing department during November were received from the preceding department at a cost of P47,595.60. For the same month, the sewing department incurred P11,772 for materials, P15,660 for labor and P2,268 for |
| REQUIREMENT: Compute for the cost of units transferred to the Finishing department. |
| (SOLUTIONS MUST BE IN GOOD ACCOUNTING FORM. EXCEL FORM WOULD BE GREAT. ACCOUNT TITLES ON THE LEFT, AMOUNTS ON THE RIGHT. USE TABLE IF NECESSARY. AVOID PARENTHETICAL SOLUTIONS. THANKS, A LOT!) |
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