The following information concerns production in the Forging Department for June. The Forging Department uses the average cost method. ACCOUNT Work in Process—Forging Department ACCOUNT NO. Balance Date Item Debit Credit Debit Credit June 1 Bal., 3,800 units, 20% completed 12,568 30 Direct materials, 87,800 units 447,780 460,348 30 Direct labor 194,800 655,148 30 Factory overhead 106,900 762,048 30 Goods transferred, 87,200 units ? ? 30 Bal., 4,400 units, 80% completed ? a. Determine the cost per equivalent unit. Round your answer to the nearest cent. _____________ per equivalent unit b. Determine the cost of the units transferred to Finished Goods. __________ c. Determine the cost of units in ending Work in 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.
The following information concerns production in the Forging Department for June. The Forging Department uses the average cost method.
| ACCOUNT Work in Process—Forging Department | ACCOUNT NO. | ||||||||
| Balance | |||||||||
| Date | Item | Debit | Credit | Debit | Credit | ||||
| June | 1 | Bal., 3,800 units, 20% completed | 12,568 | ||||||
| 30 | Direct materials, 87,800 units | 447,780 | 460,348 | ||||||
| 30 | Direct labor | 194,800 | 655,148 | ||||||
| 30 | Factory |
106,900 | 762,048 | ||||||
| 30 | Goods transferred, 87,200 units | ? | ? | ||||||
| 30 | Bal., 4,400 units, 80% completed | ? |
a. Determine the cost per equivalent unit. Round your answer to the nearest cent.
_____________ per equivalent unit
b. Determine the cost of the units transferred to Finished Goods.
__________
c. Determine the cost of units in ending Work in Process.
___________
Answer a)
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