Brite ideas Inc mass produces reading lamps. Materials used in constructing the body of the lamp are added at the start of the process while the materials used in wiring the lamps are added at the halfway point. All labor and overhead are added evenly throughout the manufactuirng process. Brite ideas uses process costing and had the folowing unit production info available for the months of June and July June July # of lamps in beginning work in process 900 1100 Lamps transferred to finished goods 5000 4600 # of lamps in ending work in process 1100 800 In June, the lamps in the beginning work in process were approx, 90% complete while those in ending work in process were only 30% complete. In July, the units remaining en ending work in process were 80% complete. All lamps in ending work in process are finished during the next month. A, For the month of June, calculate the equivalent units of production for the three major cost categories - body materials, wiring materials and labor and overhead. B. For the month of July, calculate the equivalent units of production for the three major cost categories - body materials, wiring materials and labor and overhead.
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.
Brite ideas Inc mass produces reading lamps. Materials used in constructing the body of the lamp are added at the start of the process while the materials used in wiring the lamps are added at the halfway point. All labor and
| June | July | |
| # of lamps in beginning work in process | 900 | 1100 |
| Lamps transferred to finished goods | 5000 | 4600 |
| # of lamps in ending work in process | 1100 | 800 |
In June, the lamps in the beginning work in process were approx, 90% complete while those in ending work in process were only 30% complete. In July, the units remaining en ending work in process were 80% complete. All lamps in ending work in process are finished during the next month.
A, For the month of June, calculate the equivalent units of production for the three major cost categories - body materials, wiring materials and labor and overhead.
B. For the month of July, calculate the equivalent units of production for the three major cost categories - body materials, wiring materials and labor and overhead.
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