ACCOUNT Work in Process-Blending Department ACCOUNT No. Balance Debit Credit Debit Credit Date Item Oct. 1 Bal., 2,300 units, /s completed 31 46,368 Direct materials, 26,000 units 31 31 429,000 100,560 48,480 475,368 575,928 624,408 Direct labor Factory overhead 31 Goods transferred, 25,700 units 31 Bal., 2 units, s completed
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.
Bavarian Chocolate Company processes chocolate into candy bars. The process begins by placing direct materials (raw chocolate, milk, and sugar) into the Blending Department. All materials are placed into production at the beginning of the blending process. After blending, the milk chocolate is then transferred to the Molding Department, where the milk chocolate is formed into candy bars. The following is a partial work in process account
of the Blending Department at October 31:
Attachment
Instructions
1. Prepare a cost of production report and identify the missing amounts for Work in Process—Blending Department.
2. Assuming that the October 1 work in process inventory includes direct materials of $38,295, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between September and October.
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