Weighted-average method, spoilage, equivalent units. (CMA, adapted) Consider the following data for November 2017 from MacLean Manufacturing Company, which makes silk pennants and uses a process-costing system. All direct materials are added at the beginning of the process, and conversion costs are added evenly during the process. Spoilage is detected upon inspection at the completion of the process. Spoiled units are disposed of at zero net disposal value. MacLean Manufacturing Company uses the weighted-average method of process costing. Physical Units (Pennants) 1,350 Direct Conversion Materials Costs Work in process, November 1° $ 966 $ 711 Started in November 2017 Good units completed and transferred out during November 2017 Normal spoilage Abnormal spoilage Work in process, November 30b Total costs added during November 2017 8,800 80 50 1,700 $10,302 $30,055 Degree of completion: direct materials, 100%; conversion costs, 45%. "Degree of completion: direct materials, 100%; conversion costs, 35%.
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.
use the FIFO method to summarize the total costs to account for; calculate the cost per equivalent unit for direct materials and conversion costs; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
