UNITS Beginning Work-in-Process Inventory Transferred in from Spinning Department during July Completed during July Ending Work-in-Process Inventory (80% complete for conversion work) 75 rolls 590 rolls 550 rolls 115 rolls COSTS Beginning Work-in-Process Inventory (transferred in costs, $3,700; $ 10,100 materials costs, $1,450; conversion costs, $4,950) Transferred in from Spinning Department Materials costs added during July 21,570 11,185 Conversion costs added during July (manufacturing wages, $8,050; manufacturing overhead allocated, $45,422) 53,472
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.
For all Problems, assume the weighted-average method is to be used unless you are told otherwise.
Preparing a production cost report, second department with beginning WIP;
Casey Carpet manufactures broadloom carpet in seven processes: spinning, dyeing, plying, spooling, tufting, latexing, and shearing. In the Dyeing Department, direct materials (dye) are added at the beginning of the process. Conversion costs are incurred evenly throughout the process. Information for July 2018 follows:
Requirements
- Prepare a production cost report for Casey’s Dyeing Department for July. The company uses the Weighted-average method.
- Journalize all transactions affecting Casey’s Dyeing Department during July, including the entries that have already been posted. Assume labor costs are accrued and not yet paid.
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