Shown below are the unit information and a summary of the costs charged to a production department of Casa Grande Appliances, Inc. for the month of July. Casa Grande Appliances is a manufacturer of toasters. Summary of Units Beginning Work in Process.............................................. 2,000 Units placed in production during July............................ 11,000 Units in process at July 31 (75% complete as to materials and 80% complete as to conversion cost) 3,000 Units completed and transferred to Finished Goods warehouse during July......................................... 10,000 Summary of Costs Beginning Work in Process: (direct materials $9,600; conversion costs $10,600)...... $ 20,200 Manufacturing costs incurred in July: Direct Materials..................................................... 137,400 Conversion costs................................................... 156,800 Total costs to account for........................................... $314,400 Instructions: Prepare a cost of production report for July. Prepare journal entries for (1) manufacturing costs charged to the department in July, and (2) transfer of completed units to the Finished Goods warehouse.
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.
Shown below are the unit information and a summary of the costs charged to a production department of Casa Grande Appliances, Inc. for the month of July. Casa Grande Appliances is a manufacturer of toasters.
Summary of Units
Beginning Work in Process.............................................. 2,000
Units placed in production during July............................ 11,000
Units in process at July 31 (75% complete
as to materials and 80% complete as to conversion cost) 3,000
Units completed and transferred to Finished Goods
warehouse during July......................................... 10,000
Summary of Costs
Beginning Work in Process:
(direct materials $9,600; conversion costs $10,600)...... $ 20,200
Direct Materials..................................................... 137,400
Conversion costs................................................... 156,800
Total costs to account for........................................... $314,400
Instructions:
- Prepare a cost of production report for July.
- Prepare
journal entries for (1) manufacturing costs charged to the department in July, and (2) transfer of completed units to the Finished Goods warehouse.
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