Weighted Average Method, Single Department Analysis, Uniform Costs Hatch Company produces a product that passes through three processes: Fabrication, Assembly, and Finishing. All manufacturing costs are added uniformly for all processes. The following information was obtained for the Fabrication Department for June: Work in process, June 1, had 90,000 units (40 percent completed) and the following costs: Direct materials $105,400 Direct labor 107,000 Overhead 35,000 During the month of June, 190,000 units were completed and transferred to the Assembly Department, and the following costs were added to production: Direct materials $215,000 Direct labor 144,000 Overhead 162,000 On June 30, there were 45,000 partially completed units in process. These units were 80 percent complete. Required: Prepare a cost of production report for the Fabrication Department for June using the weighted average method of costing. The report should disclose the physical flow of units, equivalent units, and unit costs and should track the disposition of manufacturing costs. Round the cost per equivalent unit to the nearest cent. Hatch Company Fabrication Department Production Report for June Unit Information Units to account for: Units to account for Units accounted for: Physical Flow Equivalent Units Total units accounted for Cost Information Costs to account for: Manufacturing Costs Total costs to account for Cost per equivalent unit Costs accounted for: Units completed Units, ending work in process Total costs accounted for
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.
Weighted Average Method, Single Department Analysis, Uniform Costs
Hatch Company produces a product that passes through three processes: Fabrication, Assembly, and Finishing. All
- Work in process, June 1, had 90,000 units (40 percent completed) and the following costs:
Direct materials $105,400 Direct labor 107,000 Overhead 35,000 - During the month of June, 190,000 units were completed and transferred to the Assembly Department, and the following costs were added to production:
Direct materials $215,000 Direct labor 144,000 Overhead 162,000 - On June 30, there were 45,000 partially completed units in process. These units were 80 percent complete.
Required:
Prepare a cost of production report for the Fabrication Department for June using the weighted average method of costing. The report should disclose the physical flow of units, equivalent units, and unit costs and should track the disposition of manufacturing costs. Round the cost per equivalent unit to the nearest cent.
| Hatch Company | ||
| Fabrication Department | ||
| Production Report for June | ||
| Unit Information | ||
| Units to account for: | ||
| Units to account for | ||
| Units accounted for: | ||
| Physical Flow | Equivalent Units | |
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| Total units accounted for | ||
| Cost Information | ||
| Costs to account for: | ||
| Manufacturing Costs | ||
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| Total costs to account for | ||
| Cost per equivalent unit | ||
| Costs accounted for: | ||
| Units completed | ||
| Units, ending work in process | ||
| Total costs accounted for |
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