The increases to Work in Process—Roasting Department for Highlands Coffee Company for May as well as information concerning production are as follows: Work in process, May 1, 1,900 pounds, 10% completed $23,760 Coffee beans added during May, 117,200 pounds 819,510 Conversion costs during May 344,430 Work in process, May 31, 1,100 pounds, 70% completed _ Goods finished during May, 118,000 pounds _ Prepare a cost of production report for May, using the average cost method. If required, round cost per equivalent unit answers to the nearest cent. Highlands Coffee Company Cost of Production Report-Roasting Department For the Month Ended May 31 Unit Information Units charged to production: Inventory in process, May 1 Received from materials storeroom Total units accounted for by the Roasting Department Units to be assigned costs: Whole Units Equivalent Units of Production Transferred to finished goods in May Total units to be assigned costs Cost Information Cost per equivalent unit: Costs Total costs for May in Roasting Department Total equivalent units Cost per equivalent unit Costs assigned to production: Inventory in process, May 1 Costs incurred in May Total costs accounted for by the Roasting Department Costs allocated to completed and partially completed units: Transferred to finished goods in May Inventory in process, May 31 Total costs assigned by the Roasting Department
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.
Cost of Production Report: Average Cost Method
The increases to Work in Process—Roasting Department for Highlands Coffee Company for May as well as information concerning production are as follows:
| Work in process, May 1, 1,900 pounds, 10% completed | $23,760 |
| Coffee beans added during May, 117,200 pounds | 819,510 |
| Conversion costs during May | 344,430 |
| Work in process, May 31, 1,100 pounds, 70% completed | _ |
| Goods finished during May, 118,000 pounds | _ |
Prepare a cost of production report for May, using the average cost method. If required, round cost per equivalent unit answers to the nearest cent.
| Highlands Coffee Company |
| Cost of Production Report-Roasting Department |
| For the Month Ended May 31 |
| Unit Information | |
| Units charged to production: | |
| Inventory in process, May 1 | |
| Received from materials storeroom | |
| Total units accounted for by the Roasting Department | |
| Units to be assigned costs: |
| Whole Units | Equivalent Units of Production | |
| Transferred to finished goods in May | ||
| Total units to be assigned costs |
| Cost Information | |
| Cost per equivalent unit: | |
| Costs | |
| Total costs for May in Roasting Department | |
| Total equivalent units | |
| Cost per equivalent unit | |
| Costs assigned to production: | |
| Inventory in process, May 1 | |
| Costs incurred in May | |
| Total costs accounted for by the Roasting Department | |
| Costs allocated to completed and partially completed units: | |
| Transferred to finished goods in May | |
| Inventory in process, May 31 | |
| Total costs assigned by the Roasting Department |
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