Washington, Inc., makes three models of motorized carts for vacation resorts, X-10, X-20, and X-40. Washington manufactures the carts in two assembly departments: Department A and Department B. All three models are processed initially in Department A, where all material is assembled. The X-10 model is then transferred to finished goods. After processing in Department A, the X-20 and X-40 models are transferred to Department B for final assembly, and then transferred to finished goods. There were no beginning work-in-process inventories on April 1. Data for April are shown in the following table. Ending work in process is 25 percent complete in Department A and 60 percent complete in Department B. Conversion costs are allocated based on the number of equivalent units processed in each department. Total X-10 X-20 X-40 Units started 500 300 200 Units completed in Department A 400 260 180 Units completed in Department B 225 165 Materials $ 450,000 $ 75,000 $ 135,000 $ 240,000 Conversion costs: Department A $ 264,000 Department B 42,000 Total conversion costs $ 306,000 Required: a. What is the unit cost of each model transferred to finished goods in April? b. What is the balance of work-in-process inventory on April 30 for Department A? Department B?
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.
Washington, Inc., makes three models of motorized carts for vacation resorts, X-10, X-20, and X-40. Washington manufactures the carts in two assembly departments: Department A and Department B. All three models are processed initially in Department A, where all material is assembled. The X-10 model is then transferred to finished goods. After processing in Department A, the X-20 and X-40 models are transferred to Department B for final assembly, and then transferred to finished goods.
There were no beginning work-in-process inventories on April 1. Data for April are shown in the following table. Ending work in process is 25 percent complete in Department A and 60 percent complete in Department B. Conversion costs are allocated based on the number of equivalent units processed in each department.
| Total | X-10 | X-20 | X-40 | |||||||||
| Units started | 500 | 300 | 200 | |||||||||
| Units completed in Department A | 400 | 260 | 180 | |||||||||
| Units completed in Department B | 225 | 165 | ||||||||||
| Materials | $ | 450,000 | $ | 75,000 | $ | 135,000 | $ | 240,000 | ||||
| Conversion costs: | ||||||||||||
| Department A | $ | 264,000 | ||||||||||
| Department B | 42,000 | |||||||||||
| Total conversion costs | $ | 306,000 | ||||||||||
Required:
a. What is the unit cost of each model transferred to finished goods in April?
b. What is the balance of work-in-process inventory on April 30 for Department A? Department B?
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