Softkin Company manufactures sun protection lotion. The Mixing Department, the first processdepartment, mixes the chemicals required for the repellant. The following data are for thecurrent year: Work in process, January 1 —Gallons started 450,000Gallons transferred out 378,000Direct materials cost $ 900,000Direct labor cost $1,785,600Overhead applied $2,678,400 Direct materials are added at the beginning of the process. Ending inventory is 95 percent com-plete with respect to direct labor and overhead. Required:Prepare a production report for the Mixing Department for the current year.
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.
Softkin Company manufactures sun protection lotion. The Mixing Department, the first process
department, mixes the chemicals required for the repellant. The following data are for the
current year:
Work in process, January 1 —
Gallons started 450,000
Gallons transferred out 378,000
Direct materials cost $ 900,000
Direct labor cost $1,785,600
Overhead applied $2,678,400
Direct materials are added at the beginning of the process. Ending inventory is 95 percent com-
plete with respect to direct labor and
Required:
Prepare a production report for the Mixing Department for the current year.
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