The Assembling Department of Fletcher Company has the following cost and production data for the month of April. Costs: Work in process, April 1 Direct materials: 100% complete $100,000 Conversion costs: 25% complete 85,700 Cost of work in process, April 1 $185,700 Costs incurred during production in April Direct materials $ 708,000 Conversion costs 300,000 Costs incurred in April $1,008,000 Units transferred out totaled 18,000. Ending work in process was 2,000 units that are 100% complete as to materials and 50% complete as to conversion costs. Instructions Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of April. (b) Compute the unit costs for the month. (c) Determine the costs to be assigned to the units transferred out and in ending work in process. Sample format below Conversion Materials Cost Units transferred out
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.
The Assembling Department of Fletcher Company has the following cost and production data for the month of April.
Costs:
Work in process, April 1
Direct materials: 100% complete $100,000
Conversion costs: 25% complete 85,700
Cost of work in process, April 1 $185,700
Costs incurred during production in April
Direct materials $ 708,000
Conversion costs 300,000
Costs incurred in April $1,008,000
Units transferred out totaled 18,000. Ending work in process was 2,000 units that are 100% complete as to materials and 50% complete as to conversion costs.
Instructions
- Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of April.
(b) Compute the unit costs for the month.
(c) Determine the costs to be assigned to the units transferred out and in ending work in
process.
Sample format below
Conversion
- Materials Cost
Units transferred out
Work in process, _______
___________ x ______%
___________ x ______%
- Conversion
Materials Costs Total
Costs in April
Equivalent units
Unit costs
(c)
Transferred out
Work in process
Materials
Conversion costs
Total costs
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