Timing Technology, Incorporated, manufactures timing devices. During 20x1, 2,700,000 units were completed and transferred to finished-goods inventory. On December 31, 20x1, there were 440,000 units in work in process. These units were 45 percent complete as to conversion and 100 percent complete as to direct material. Finished-goods inventory consisted of 1,134,000 units. Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 100 percent of direct-labor costs. There was no finished-goods inventory on January 1, 20x1. A review of the inventory cost records disclosed the following information: Units Direct Material (Costs) Direct Labor (Costs) Work in process, January 1, 20x1 (82% complete as to conversion) 430,000 $ 334,000 $ 327,400 Units started in production 2,710,000 Direct-material costs $ 9,086,000 Direct-labor costs $ 7,207,400 Required: prepare a schedule as of December 31, 20x1, to compute the physical flow of units. 2. prepare a schedule as of December 31, 20x1, to compute the equivalent units of production using the weighted-average method. 3. prepare a schedule as of December 31, 20x1, to compute the costs per equivalent unit for material and conversion. Note: Round "Cost per Equivalent Unit" to 2 decimal places. 4. prepare a schedule as of December 31, 20x1, to compute the cost of work-in-process inventory. 5. prepare a schedule as of December 31, 20x1, to compute the cost of finished-goods 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.
Timing Technology, Incorporated, manufactures timing devices. During 20x1, 2,700,000 units were completed and transferred to finished-goods inventory. On December 31, 20x1, there were 440,000 units in work in process. These units were 45 percent complete as to conversion and 100 percent complete as to direct material. Finished-goods inventory consisted of 1,134,000 units. Materials are added to production at the beginning of the manufacturing process, and
|
|
Units |
Direct Material (Costs) |
Direct Labor (Costs) |
|
Work in process, January 1, 20x1 (82% complete as to conversion) |
430,000 |
$ 334,000 |
$ 327,400 |
|
Units started in production |
2,710,000 |
|
|
|
Direct-material costs |
|
$ 9,086,000 |
|
|
Direct-labor costs |
|
|
$ 7,207,400 |
Required:
- prepare a schedule as of December 31, 20x1, to compute the physical flow of units.
2. prepare a schedule as of December 31, 20x1, to compute the equivalent units of production using the weighted-average method.
3. prepare a schedule as of December 31, 20x1, to compute the costs per equivalent unit for material and conversion.
Note: Round "Cost per Equivalent Unit" to 2 decimal places.
4. prepare a schedule as of December 31, 20x1, to compute the cost of work-in-process inventory.
5. prepare a schedule as of December 31, 20x1, to compute the cost of finished-goods inventory.
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Thank you for the help,
I have two follow up questions regarding this,
-First question is 3. Calculation of cost per equivalent units in ( converstion)
beginning Work in the process should it be 654,800 instead of 327,400 becuase converstion costs = direct labor +
and Cost incurred during the period for conversation cost = Direct labor cost + overhead cost = 7,207,400 + (100% * 7,207,400) = 14,414,800?
-Second question is 5. Calculation of Cost of units Completed and Transferred out (Finished Goods) for December 31, 20x1, should it we use Equivalent Units (A) 1,134,000 units instead of 2,700,000 becuase we are preparing a schedule of December 31?
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