Stem Games manufactures playing cards. It has three departments: Printing, Cutting & Collating, and Wrapping. Transferred-in costs are considered materials costs. The following information is available for the Wrapping department for the month of October: Physical Units Beginning work in process 281,000 (100% complete for materials, 80% complete for conversion) Decks transferred in 3,180,000 Decks completed and transferred to Finished Goods Inventory 3,210,000 Ending Work in Process ? (100% complete for materials, 45% complete for conversion Costs: Beginning work in process: Direct materials $ 192,000 Conversion cost $ 20,200 Costs transferred in $ 1,375,460 October costs: Direct materials $ 24,600 Conversion costs $ 445,013 Required: 1. Reconcile the total Cost to Account for the process. 2. Prepare a statement of total cost accounted for the 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.
Stem Games manufactures playing cards. It has three departments: Printing, Cutting & Collating, and Wrapping. Transferred-in costs are considered materials costs. The following information is available for the Wrapping department for the month of October:
| Physical Units |
|||
| Beginning work in process | 281,000 | ||
| (100% complete for materials, 80% complete for conversion) | |||
| Decks transferred in | 3,180,000 | ||
| Decks completed and transferred to Finished Goods Inventory | 3,210,000 | ||
| Ending Work in Process | ? | ||
| (100% complete for materials, 45% complete for conversion | |||
| Costs: | |||
| Beginning work in process: | |||
| Direct materials | $ | 192,000 | |
| Conversion cost | $ | 20,200 | |
| Costs transferred in | $ | 1,375,460 | |
| October costs: | |||
| Direct materials | $ | 24,600 | |
| Conversion costs | $ | 445,013 | |
Required:
1. Reconcile the total Cost to Account for the process.
2. Prepare a statement of total cost accounted for the process.
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