Sumter Corporation uses the weighted-average method in its process costing system. The following data pertain to operations in the first processing department for a recent month: Work in process, beginning: Units in process Percent complete with respect to materials Percent complete with respect to conversion Costs in the beginning inventory: Materials cost Conversion cost Units started during the month Units completed and transferred out during the month Costs added to production during the month: Materials cost Conversion cost Work in process, ending: Units in process Percent complete with respect to materials. Percent complete with respect to conversion 6,000 60% 20% $78,200 $ 3,600 ? 70,000 $ 286,600 $ 216,000 8,000 75% 25% How much cost, in total, was assigned to the units transferred out to the next department during the month?
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.
Solution:
Equivalent units of production = Units completed and transferred out + Units in ending WIP * %Completion with respect to material or conversion as the case may be
Cost per equivalent unit = Total costs to be accounted for / Equivalent units of production
Cost of units completed and transferred out = Total units completed and transferred out * Sum of cost per equivalent unit of material and conversion
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
