Explanation Process costs: It is a method of cost accounting, which is used where the production is continuous, and the product needs various processes to complete. This method is used to ascertain the cost of the product at each process or stage of production. Equivalents units for production: The activity of a processing department in terms of fully completed units is known as equivalent units. It includes the completed units of direct materials and conversion cost of beginning work in process, units completed and transferred out, and ending work in process. Production cost report: A production cost report is a comprehensive report prepared for each department separately at the end of a particular period, which represents the physical flow and cost flow of product for the concerned department. Prepare a cost of production report using the weighted average method for May. Company HCC Cost of Production Report—Roasting Department For the Month Ended May 31 UNITS Whole units Equivalent Units of production Units charged to production: Inventory in process, May 1 1,150 Received from materials storeroom 10,900 Total units accounted for by the roasting department 12,050 Units to be assigned costs: Transferred to finished goods in May 11,250 11,250 Inventory in process, May 31 800 640 (1) Total units to be assigned costs 12,050 11,890 COSTS Amount ($) Amount ($) Cost per equivalent unit: Total costs for May in Roasting Department (A) $428,04 (2) Total equivalent units (B) $11,890 Cost per equivalent unit ( A B ) $ 3.60 Costs assigned to production: Inventory in process, May 1 $ 1,700 Costs incurred in May $41,104 (3) Total costs accounted for by the Roasting Department $ 42,804 Costs allocated to completed and partially completed units: Transferred to finished goods in May ( 11 , 250 units × $ 3

15th Edition

ISBN: 9781337912020

Author: Carl Warren, Ph.d. Cma William B. Tayler

Publisher: South-Western College Pub

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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.

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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 …

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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 compari…

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Chapter 3, Problem 26E

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Prepare a cost of production report using the weighted average method for May.

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Chapter 3 Solutions

Managerial Accounting

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