Production data: Pounds in process, May 1; materials 100% complete; conversion 90% complete 62,000 Pounds started into production during May 270,000 Pounds completed and transferred out ? Pounds in process, May 31; materials 70% complete; conversion 30% complete 22,000 Cost data: Work in process inventory, May 1: Materials cost $ 55,100 Conversion cost $ 26,800 Cost added during May: Materials cost $ 286,570 Conversion cost $ 147,330
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.
Builder Products, Incorporated, uses the weighted-average method in its
| Production data: | |
|---|---|
| Pounds in process, May 1; materials 100% complete; conversion 90% complete | 62,000 |
| Pounds started into production during May | 270,000 |
| Pounds completed and transferred out | ? |
| Pounds in process, May 31; materials 70% complete; conversion 30% complete | 22,000 |
| Cost data: | |
| Work in process inventory, May 1: | |
| Materials cost | $ 55,100 |
| Conversion cost | $ 26,800 |
| Cost added during May: | |
| Materials cost | $ 286,570 |
| Conversion cost | $ 147,330 |
Required:
1. Compute the equivalent units of production for materials and conversion for May. And compute the cost per equivalent unit for materials and conversion for May.
2. Compute the cost of ending work in process inventory for materials, conversion, and in total for May. And compute the cost of units transferred out to the next department for materials, conversion, and in total for May.
3. Prepare a cost reconciliation report for May.
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