Weighted-average method. Hoffman Company manufactures car seats in its Boise plant. Each car se passes through the assembly department and the testing department. This problem focuses on the assembl department. The process-costing system at Hoffman Company has a single direct-cost category (dire materials) and a single indirect-cost category (conversion materials are added at the costs). Direc beginning of the process. Conversion costs are added evenly during the process. When the assembl department finishes work on each car seat, it is immediately transferred to testing. Hoffman Company uses the weighted-average method of process costing. Data for the assembl department for October 2019 are as follows: Physical Units Direct Conversion (Car Seats) Materials Costs Work in process, October 1ª 4,000 $1,248,000 $ 241,650 Started during October 2019 22,500 Completed during October 2019 26,000 Work in process, October 31b 500 Total costs added during October $4,635,000 $2,575,125 2019 *Degree of completion: direct materials,?%; conversion costs, 45%. b Degree of completion: direct materials.?%: conversion costs. 65%.
Weighted-average method. Hoffman Company manufactures car seats in its Boise plant. Each car se passes through the assembly department and the testing department. This problem focuses on the assembl department. The process-costing system at Hoffman Company has a single direct-cost category (dire materials) and a single indirect-cost category (conversion materials are added at the costs). Direc beginning of the process. Conversion costs are added evenly during the process. When the assembl department finishes work on each car seat, it is immediately transferred to testing. Hoffman Company uses the weighted-average method of process costing. Data for the assembl department for October 2019 are as follows: Physical Units Direct Conversion (Car Seats) Materials Costs Work in process, October 1ª 4,000 $1,248,000 $ 241,650 Started during October 2019 22,500 Completed during October 2019 26,000 Work in process, October 31b 500 Total costs added during October $4,635,000 $2,575,125 2019 *Degree of completion: direct materials,?%; conversion costs, 45%. b Degree of completion: direct materials.?%: conversion costs. 65%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
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Transcribed Image Text:Weighted Average Method
HOFFMAN COMPANY
Production Cost Report
Month Ended October 31, 2022
Equivalent Units
Physical
Units
Direct Conversion
Materials Costs
UNITS
Units to account for:
Beginning WIP
Started in production
Total units to account for
Units accounted for:
Beginning WIP
Started and completed
Ending work-in-process
Total units accounted for
4000
22500
24500
COSTS
Costs to account for:
Beginning WIP
Current period costs
Total costs to account for
Divided by: Total EUP
Cost per equivalent unit
Costs accounted for:
Transferred out
Ending WIP inventory
Direct Material
Conversion
Total costs accounted for
Direct
Materials
Conversion
Total
Costs
Costs
1489,650
1,248,000 241,650
4635,000 2,575,125
7210,125
8,699,775
Transcribed Image Text:Weighted-average method. Hoffman Company manufactures car seats in its Boise plant. Each car seat
passes through the assembly department and the testing department. This problem focuses on the assembly
department. The process-costing system at Hoffman Company has a single direct-cost category (direct
materials) and a single indirect-cost category (conversion materials are added at the costs). Direct
beginning of the process. Conversion costs are added evenly during the process. When the assembly
department finishes work on each car seat, it is immediately transferred to testing.
Hoffman Company uses the weighted-average method of process costing. Data for the assembly
department for October 2019 are as follows:
Physical Units
(Car Seats)
Direct
Materials
Conversion
Costs
Work in process, October 1ª
4,000
$1,248,000
$ 241,650
Started during October 2019
22,500
Completed during October 2019
26,000
Work in process, October 31b
500
Total costs added during October
$4,635,000
$2,575,125
2019
* Degree of completion: direct materials,?%; conversion costs, 45%.
bDegree of completion: direct materials,?%; conversion costs, 65%.
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