Gallons Beginning Work-in-Process Inventory 500 gallons Started in production 8,600 gallons Completed and transferred out to Packaging in March 7,900 gallons Ending Work-in-Process Inventory (80% of the way through the fermenting process) 1,200 gallons Costs Beginning Work-in-Process Inventory: Direct materials 540 Direct labor 195 Manufacturing overhead allocated 210 Costs added during March: Direct materials 9,288 Direct labor 3,305 Manufacturing overhead allocated 3,378 Total costs added during March $ 15,971
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.
Computing EUP, assigning costs, with beginning WIP, no costs transferred in
Shea Winery in Pleasant Valley, New York, has two departments: Fermenting and packaging. Direct materials are added at the beginning of the fermenting process (grapes) and at the end of the packaging process (bottles). Conversion costs are added evenly throughout each process. The company uses the weight-average method. Data from the month of March for the Fermenting Department are as follows:
Requirements
- Compute the Fermenting Departments equivalent units of production for direct materials and for conversion costs.
- Compute the total costs of the units (gallons)
- completed and transferred out to the Packaging Department.
- in the Fermenting Department ending Work-in-Process Inventory.
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