Watertime inc. manufactures old fashioned grandfather clocks. The production utilizes a highly automated assembly line. The firm has identified two cost categories: direct materials and conversion costs. During the production process each clock moves first through the Assembly Department, where materials are added and the clock is assembled, then through the Testing Department, where the clock is inspected for quality control. All direct materials are added at the beginning of the production process but conversion costs are allocated evenly throughout production. Spartans Inc. uses weighted-average costing. Data for Department A for June 2020 are: Beginning WiP Inventory 320 units Direct Materials (100% complete) Conversion (35% complete) Units started during June 750 units Ending WiP Inventory June 30 300 units Direct Materials (100% complete) Conversion (65% complete) What were the equivalent units of direct materials and conversion costs, respectively, at the end of June? Equivalent Units for Direct Materials = Equivalent Units for Conversion Costs =
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.
Watertime inc. manufactures old fashioned grandfather clocks. The production utilizes a highly automated assembly line. The firm has identified two cost categories: direct materials and conversion costs. During the production process each clock moves first through the Assembly Department, where materials are added and the clock is assembled, then through the Testing Department, where the clock is inspected for quality control. All direct materials are added at the beginning of the production process but conversion costs are allocated evenly throughout production. Spartans Inc. uses weighted-average costing.
Data for Department A for June 2020 are:
Beginning WiP Inventory 320 units
Direct Materials (100% complete)
Conversion (35% complete)
Units started during June 750 units
Ending WiP Inventory June 30 300 units
Direct Materials (100% complete)
Conversion (65% complete)
What were the equivalent units of direct materials and conversion costs, respectively, at the end of June?
Equivalent Units for Direct Materials =
Equivalent Units for Conversion Costs =
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