Brun Company produces its product through two processing departments: Mixing and Baking. Direct materials are added at the beginning of the mixing process. Conversion costs are added evenly. The company uses monthly reporting periods for its weighted-average process costing. The Work in Process Inventory—Mixing account had a balance of $21,300 on November 1, which consisted of $6,800 of direct materials and $14,500 of conversion costs. During the month, the Mixing department incurred the following costs. Direct materials $116,400 Conversion . $1,067,000 At the beginning of the month, 7,500 units were in process in the Mixing department. During November, the Mixing department started 104,500 units and transferred 100,000 units of its product to Baking. At the end of the month, the Mixing department’s work in process inventory consisted of 12,000 units that were 100% complete with respect to direct materials and 25% complete with respect to conversion. Required 1. Prepare the Mixing department’s process cost summary for November using the weighted-average method. 2. Prepare the journal entry dated November 30 to transfer the cost of the completed units to Baking.
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.
Brun Company produces its product through two processing departments: Mixing and Baking. Direct
materials are added at the beginning of the mixing process. Conversion costs are added evenly. The company
uses monthly reporting periods for its weighted-average
Inventory—Mixing account had a balance of $21,300 on November 1, which consisted of $6,800 of direct
materials and $14,500 of conversion costs.
During the month, the Mixing department incurred the following costs. Direct materials $116,400 Conversion . $1,067,000 At the beginning of the month, 7,500 units were in process in the Mixing department. During November,
the Mixing department started 104,500 units and transferred 100,000 units of its product to Baking. At the
end of the month, the Mixing department’s work in process inventory consisted of 12,000 units that were
100% complete with respect to direct materials and 25% complete with respect to conversion.
Required
1. Prepare the Mixing department’s process cost summary for November using the weighted-average method.
2. Prepare the
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