The following information relates to the Blending Department of Monster Inc. for the month of March: Units Percentage Completed (With respect to conversion) Units started 55,000 Completed and transferred 50,000 Beginning work in process 15,000 70% Ending work in process 16,000 40% Materials Labor and Overhead Transferred- In Costs for March: Beginning work in process P 48,000 P 37,100 P 76,000 Added during the month P232,000 P171,500 P274,000 All materials are added at the beginning of the process. Inspection occurs 80 percent of the way through the process. Normal spoilage is 5 percent of the good units completed. Required:
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 relates to the Blending Department of Monster Inc. for the month of March:
|
|
Units |
Percentage Completed (With respect to conversion) |
|
Units started |
55,000 |
|
|
Completed and transferred |
50,000 |
|
|
Beginning work in process |
15,000 |
70% |
|
Ending work in process |
16,000 |
40% |
|
|
Materials |
Labor and |
Transferred- In |
|
Costs for March: |
|
|
|
|
Beginning work in process |
P 48,000 |
P 37,100 |
P 76,000 |
|
Added during the month |
P232,000 |
P171,500 |
P274,000 |
All materials are added at the beginning of the process. Inspection occurs 80 percent of the way through the process. Normal spoilage is 5 percent of the good units completed.
Required:
a. Determine the weighted average equivalent units for materials, transferred-in, and conversion.
b.Determine the first-in, first-out (FIFO) equivalent units for materials, transferred-in, andconversion.
c. Compute the weighted average cost per unit for conversion.
d. Compute the weighted average cost per unit for materials.
e. Calculate the cost assigned to ending work in process using weighted average.
f. Calculate the cost assigned to goods transferred out using weighted average.
g. Show the entries to the following T-account:
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