BDB Company manufactures its one product by a process that requires two departments. The production starts in Department A and is completed in Department B. Direct materials are added at the beginning of the process in Department A. Additional direct materials are added when the process is 50% complete in Department B. Conversion costs are incurred proportionally throughout the production processes in both departments. On April 1, Department A had 500 units in Work-in-Process estimated to be 30% complete for conversion; Department 8 had 300 units in Work-in-Process estimated to be 40% complete for conversion. During April, Department A started 2,000 units and completed 2,100 units; Department B completed 2,000 units. The ending Work-in-Process Inventory on April 30 in Department A is estimated to be 50% complete for conversion, and the ending Work-in-Process Inventory in Department B is estimated to be 70% complete for conversion. The cost sheet for Department A shows that the units in the beginning Work-in-Process Inventory had $4,510 in direct materials costs and $1,910 in conversion costs. The production costs incurred in April were $20,240 for direct materials and $25,000 for conversion. Department B's beginning Work-in-Process Inventory on April 1 was $3,412, of which $1,800 was transferred-in costs; it incurred $41,760 in direct materials costs and $26,546 in conversion costs in April. BDB Company uses the weighted-average method for Departments A and B. Required: 1. Prepare a production cost report for Department A. 2. Prepare a production cost report for Department 0.
BDB Company manufactures its one product by a process that requires two departments. The production starts in Department A and is completed in Department B. Direct materials are added at the beginning of the process in Department A. Additional direct materials are added when the process is 50% complete in Department B. Conversion costs are incurred proportionally throughout the production processes in both departments. On April 1, Department A had 500 units in Work-in-Process estimated to be 30% complete for conversion; Department 8 had 300 units in Work-in-Process estimated to be 40% complete for conversion. During April, Department A started 2,000 units and completed 2,100 units; Department B completed 2,000 units. The ending Work-in-Process Inventory on April 30 in Department A is estimated to be 50% complete for conversion, and the ending Work-in-Process Inventory in Department B is estimated to be 70% complete for conversion. The cost sheet for Department A shows that the units in the beginning Work-in-Process Inventory had $4,510 in direct materials costs and $1,910 in conversion costs. The production costs incurred in April were $20,240 for direct materials and $25,000 for conversion. Department B's beginning Work-in-Process Inventory on April 1 was $3,412, of which $1,800 was transferred-in costs; it incurred $41,760 in direct materials costs and $26,546 in conversion costs in April. BDB Company uses the weighted-average method for Departments A and B. Required: 1. Prepare a production cost report for Department A. 2. Prepare a production cost report for Department 0.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 16E: Heap Company manufactures a product that passes through two processes: Fabrication and Assembly. The...
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Concept explainers
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:BDB Company manufactures its one product by a process that requires two departments. The production starts in Department A and
is completed in Department B. Direct materials are added at the beginning of the process in Department A. Additional direct materials
are added when the process is 50% complete in Department B. Conversion costs are incurred proportionally throughout the
production processes in both departments.
On April 1, Department A had 500 units in Work-in-Process estimated to be 30% complete for conversion; Department 8 had 300 units
in Work-in-Process estimated to be 40% complete for conversion. During April, Department A started 2,000 units and completed 2,100
units; Department B completed 2,000 units. The ending Work-in-Process Inventory on April 30 in Department A is estimated to be 50%
complete for conversion, and the ending Work-in-Process Inventory in Department B is estimated to be 70% complete for conversion.
The cost sheet for Department A shows that the units in the beginning Work-in-Process Inventory had $4,510 in direct materials costs
and $1,910 in conversion costs. The production costs incurred in April were $20,240 for direct materials and $25,000 for conversion.
Department B's beginning Work-in-Process Inventory on April 1 was $3,412, of which $1,800 was transferred-in costs; it incurred
$41,760 in direct materials costs and $26,546 in conversion costs in April.
BDB Company uses the weighted-average method for Departments A and B.
Required:
1. Prepare a production cost report for Department A
2. Prepare a production cost report for Department 0.
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