Wetzel Manufacturing Company has two departments, Assembly and Finishing. The following data for the Assembly Department fo June Year 2 is provided: Beginning work in process Started during the month Completed during the month Ending work in process Costs added during month Required: a. Prepare a cost of production report for the Assembly Department. Wetzel uses the weighted average method to determine equivalent units. Determination of Equivalent Units Beginning inventory Units started Total Cost of Production Report Assembly Department Month Ended June 30 Transferred to Finishing Department Ending inventory Total Direct Direct Units % Complete Material Labor Overhead 75% Determination of Cost per Unit Cost accumulation: Beginning inventory Materials Labor Overhead Total product costs Divide by equivalent units Cost per equivalent unit Cost Allocation 500 1,500 1,750 250 Transferred to Finishing Department Ending work in process inventory Total Actual 40% $18,276 $7,620 $4,564 Total $9,500 Equivalent Units $30,460
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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