You have recently been appointed as the cost accountant for Carla Vista Hair Co. Ltd., a manufacturer of hair shampoo. Your first task is to clear up the production records of the mixing department for November 2022. You learn that the mixing department is the last stage of the shampoo production process. Units transferred from the previous department use direct labour and overhead inputs evenly in mixing. A secret ingredient is also added to each unit at the 40% point in processing You also find out that the beginning inventory for the month of November was 4,360 units with the following costs: Transferred-in costs Direct materials Conversion costs $17,440 3,920 26,028 In addition, during November, 17,440 units were transferred to mixing at a $4 unit cost. The ending inventory consisted of 5,450 units that were 60% complete. During the month, direct materials of $28,780 were added and 9,270 hours of direct labour were used at a wage rate of $12 per hour. The overhead rate for 2022, applied on a basis of direct labour hours, was based on a predicted annual usage of 130,800 hours and a cost function derived from the following overhead equation: Y = 65,400 + 2X, where Y is the total overhead costs and X is the direct labour hours.
You have recently been appointed as the cost accountant for Carla Vista Hair Co. Ltd., a manufacturer of hair shampoo. Your first task is to clear up the production records of the mixing department for November 2022. You learn that the mixing department is the last stage of the shampoo production process. Units transferred from the previous department use direct labour and overhead inputs evenly in mixing. A secret ingredient is also added to each unit at the 40% point in processing You also find out that the beginning inventory for the month of November was 4,360 units with the following costs: Transferred-in costs Direct materials Conversion costs $17,440 3,920 26,028 In addition, during November, 17,440 units were transferred to mixing at a $4 unit cost. The ending inventory consisted of 5,450 units that were 60% complete. During the month, direct materials of $28,780 were added and 9,270 hours of direct labour were used at a wage rate of $12 per hour. The overhead rate for 2022, applied on a basis of direct labour hours, was based on a predicted annual usage of 130,800 hours and a cost function derived from the following overhead equation: Y = 65,400 + 2X, where Y is the total overhead costs and X is the direct labour hours.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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:You have recently been appointed as the cost accountant for Carla Vista Hair Co. Ltd., a manufacturer of hair shampoo. Your first task
is to clear up the production records of the mixing department for November 2022.
You learn that the mixing department is the last stage of the shampoo production process. Units transferred from the previous
department use direct labour and overhead inputs evenly in mixing. A secret ingredient is also added to each unit at the 40% point in
processing.
You also find out that the beginning inventory for the month of November was 4,360 units with the following costs:
Transferred-in costs
Direct materials
Conversion costs
In addition, during November, 17,440 units were transferred to mixing at a $4 unit cost. The ending inventory consisted of 5,450 units
that were 60% complete. During the month, direct materials of $28,780 were added and 9,270 hours of direct labour were used at a
wage rate of $12 per hour.
The overhead rate for 2022, applied on a basis of direct labour hours, was based on a predicted annual usage of 130,800 hours and a
cost function derived from the following overhead equation: Y = 65,400 + 2X, where Y is the total overhead costs and X is the direct
labour hours.
Using weighted-average process costing techniques, calculate the following for the mixing department for November 2022:
(a)
(b)
$17,440
3,920
26,028
The number of equivalent units of production in ending work in process inventory.
Work In Process Inventory
Direct materials
Conversion Costs
Completed Units
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