Splish is a producer of perfume, sourcing materials from all over the world as it creates beautiful scents. In November, Splish was producing perfume that would be bottled into 1.2 ounce sizes. The manufacturing department reports the following information related to production of liquid perfume this month. Step 2: Determine physical status of units and convert into equivalent units Physical Units Equivalent Units DM Conversion Costs % Added Equiv. Units % Added Equiv. Units Units completed this period 380 100% 380 100% 380 Units in ending WIP Inventory 40 100% 40 40% 16 Total units accounted for 420 Total equivalent units of work done 420 396 Step 3: Account for costs Total Costs DM Conversion Costs Costs in beginning WIP Inventory (from last period) $2,065 $1,400 $665 Costs added to WIP Inventory this period 10,247 6,160 4,087 Total costs to account for $12,312 $7,560 $4,752 Assign costs to the company’s units completed and to the units in ending WIP Inventory for August by completing Step 5 of the template. Total cost of units completed and removed from WIP Inventory $enter a dollar amount Cost of units in ending WIP Inventory $enter a dollar amount Recognizing that Splish’s products must still move through the bottling department before being ready for sale, record the journal entry to recognize the completion and removal of units from the manufacturing department. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount To reach its target profit, Splish’s total budgeted product cost is $33.50 per unit. Therefore, what is the maximum additional cost per unit the company can incur in the bottling department? (Round answer to 2 decimal places, e.g. 15.25.) Maximum additional cost per unit for bottling $enter the maximum additional cost per unit for bottling in dollars rounded to 2 decimal places Splish uses the weighted-average method of process costing.
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.
Splish is a producer of perfume, sourcing materials from all over the world as it creates beautiful scents. In November, Splish was producing perfume that would be bottled into 1.2 ounce sizes. The manufacturing department reports the following information related to production of liquid perfume this month.
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Step 2: Determine physical status of units and convert into equivalent units
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Physical Units
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Equivalent Units
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DM
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Conversion Costs
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% Added
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Equiv. Units
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% Added
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Equiv. Units
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Units completed this period
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380 | 100% | 380 | 100% | 380 | |||||
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Units in ending WIP Inventory
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40 | 100% | 40 | 40% | 16 | |||||
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Total units accounted for
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420 | |||||||||
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Total equivalent units of work done
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420 | 396 |
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Step 3: Account for costs
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Total Costs
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DM
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Conversion Costs
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Costs in beginning WIP Inventory (from last period)
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$2,065 | $1,400 | $665 | |||
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Costs added to WIP Inventory this period
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10,247 | 6,160 | 4,087 | |||
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Total costs to account for
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$12,312 | $7,560 | $4,752 |
Assign costs to the company’s units completed and to the units in ending WIP Inventory for August by completing Step 5 of the template.
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Total cost of units completed and removed from WIP Inventory
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$enter a dollar amount | |
|---|---|---|
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Cost of units in ending WIP Inventory
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$enter a dollar amount |
|
Account Titles and Explanation
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Debit
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Credit
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|---|---|---|
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enter an account title
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enter a debit amount
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enter a credit amount
|
|
enter an account title
|
enter a debit amount
|
enter a credit amount
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| Maximum additional cost per unit for bottling |
$enter the maximum additional cost per unit for bottling in dollars rounded to 2 decimal places
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Splish uses the weighted-average method of
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