Weighted-Average Method; Transferred-in Costs Sanyo Corporation manufactures a popular model of business calculators in a suburb of Seoul, South Korea. The production process goesthrough two departments: assembly and testing. The following information (in thousands of SouthKorean currency, the won) pertains to the testing department for the month of July.[LO 6-2, 6-3, 6-5][LO 6-2, 6-4, 6-6]Work-in-Process Inventory, July 1 6,000 unitsTransferred-in costs 57,800 won (100% complete)Costs added in JulyDirect materials 23,400 won (100% complete)Conversion 23,360 won (80% complete)Costs of Production Direct Materials ConversionMolding department $450,000 $90,000Finishing department — 80,290Direct materials 90%Conversion 60%Direct materials 92,520 wonConversion 109,300 wonDuring the month of July, 15,000 units were transferred in from the assembly department at the cost of141,700 won, and the testing department added costs of 201,820 won, as follows:During the month, 18,000 units were completed and transferred to the warehouse. At July 31, the completion percentage of Work-in-Process was as follows:Required1. Prepare the production cost report of the testing department for the month of July using weightedaverage process costing.2. Check the most recent issue of The Wall Street Journal or www.federalreserve.gov/releases/H10/hist/ to learn the exchange rate between the U.S. dollar and the South Korean won
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; Transferred-in Costs Sanyo Corporation manufactures a popular model of business calculators in a suburb of Seoul, South Korea. The production process goes
through two departments: assembly and testing. The following information (in thousands of South
Korean currency, the won) pertains to the testing department for the month of July.
[LO 6-2, 6-3, 6-5]
[LO 6-2, 6-4, 6-6]
Work-in-Process Inventory, July 1 6,000 units
Transferred-in costs 57,800 won (100% complete)
Costs added in July
Direct materials 23,400 won (100% complete)
Conversion 23,360 won (80% complete)
Costs of Production Direct Materials Conversion
Molding department $450,000 $90,000
Finishing department — 80,290
Direct materials 90%
Conversion 60%
Direct materials 92,520 won
Conversion 109,300 won
During the month of July, 15,000 units were transferred in from the assembly department at the cost of
141,700 won, and the testing department added costs of 201,820 won, as follows:
During the month, 18,000 units were completed and transferred to the warehouse. At July 31, the completion percentage of Work-in-Process was as follows:
Required
1. Prepare the production cost report of the testing department for the month of July using weightedaverage
2. Check the most recent issue of The Wall Street Journal or www.federalreserve.gov/releases/H10/
hist/ to learn the exchange rate between the U.S. dollar and the South Korean won
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