Victory Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 775,000 units of product to finished goods. At the end of November, the goods in process inventory consists of 183,000 units that are 70% complete with respect to labor. Beginning inventory had $560,430 of direct materials and $180,620 of direct labor cost. The direct material cost added in November is $3,750,570, and the direct labor cost added is $3,431,780. blem 16-2A Part 1
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.
![Problem 16-2A Weighted average: Cost per equivalent unit; costs assigned to products LO C2, C3
[The following information applies to the questions displayed below.]
Victory Company uses weighted-average process costing to account for its production
costs. Direct labor is added evenly throughout the process. Direct materials are added at
the beginning of the process. During November, the company transferred 775,000 units
of product to finished goods. At the end of November, the goods in process inventory
consists of 183,000 units that are 70% complete with respect to labor. Beginning
inventory had $560,430 of direct materials and $180,620 of direct labor cost. The
direct material cost added in November is $3,750,570, and the direct labor cost added is
$3,431,780.
Problem 16-2A Part 1
Required:
Determine the equivalent units of production with respect to direct labor and direct
1.
materials.
Equivalent units of production (EUP)- weighted average method
Units
% Materials EUP- Materials
% Labor
EUP- Labor
Units completed and transferred out
775,000
Ending goods in process - units
183,000
Total units
958,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9c371247-74ac-400b-bc7d-96d516bb0e38%2F93068e7c-bcaa-4719-836d-036a643a6eff%2Fp0ba4g_processed.jpeg&w=3840&q=75)
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