The following data pertain to Tulsa Paperboard Company, a manufacturer of cardboard boxes. Work in process, February 1 10,000Units Direct Material $ 5,500 Conversion 17,000 Costs incurred during February Direct Material $ 110,000 Conversion 171,600 The equivalent units of activity for February were as follows: Direct material (Weighted – average method) 110,000 Conversion (Weighted – average method) 92,000 Completed and transferred out 90,000 Required: Compute the following amount using weighted –average process costing. 1- Cost of goods completed and transferred out during February. 2- Cost of the February 28 work-in-process inventory.
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.
Question
The following data pertain to Tulsa Paperboard Company, a manufacturer of cardboard boxes.
Work in process, February 1 10,000Units
Direct Material $ 5,500
Conversion 17,000
Costs incurred during February
Direct Material $ 110,000
Conversion 171,600
The equivalent units of activity for February were as follows:
Direct material (Weighted – average method) 110,000
Conversion (Weighted – average method) 92,000
Completed and transferred out 90,000
Required:
Compute the following amount using weighted –average
1- Cost of goods completed and transferred out during February.
2- Cost of the February 28 work-in-process inventory.
Cost Per Equivalent Unit = Total Cost Incurred / Equivalent Units
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