The Metal Works Company manufactures a product that goes through two departments prior to completion. The following information is available on work in one of these departments, the Forming Department, during March:percentage completed units materials conversionWork in process, March 1 70,000 5/7 3/7started in production 460,000completed & transferred out 450,000work in process, march 31 80,000 7/8 5/8Cost in the beginning work-in-process inventory and cost added during the month were as follows: Materials Conversionwork in process March 1 42,190 38,000cost added during march 440,810 394,000The Forming Department is the first department in the production process; after forming has been completed, the units are transferred to the Finishing Department.Required:a) Assuming the company uses the weighted-average method, calculate the equivalent units and unit cost for materials and conversion costs, rounded to the nearest tenth of a cent. Show your work. b) Assuming the company uses the FIFO method, calculate the equivalent units and unit cost for materials and conversion costs, rounded to the nearest tenth of a cent. Show you work.
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 Metal Works Company manufactures a product that goes through two departments prior to completion. The following information is available on work in one of these departments, the Forming Department, during March:
percentage completed
units materials conversion
Work in process, March 1 70,000 5/7 3/7
started in production 460,000
completed & transferred out 450,000
work in process, march 31 80,000 7/8 5/8
Cost in the beginning work-in-process inventory and cost added during the month were as follows:
Materials Conversion
work in process March 1 42,190 38,000
cost added during march 440,810 394,000
The Forming Department is the first department in the production process; after forming has been completed, the units are transferred to the Finishing Department.
Required:
a) Assuming the company uses the weighted-average method, calculate the equivalent units and unit cost for materials and conversion costs, rounded to the nearest tenth of a cent. Show your work.
b) Assuming the company uses the FIFO method, calculate the equivalent units and unit cost for materials and conversion costs, rounded to the nearest tenth of a cent. Show you work.
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