The inventory at June 1 and the costs charged to Work in Process - Department “23” during the month of June are as follows: Inventory in process, June 1 3,800 units, 80% completed ($25,000 Materials; $35,400 conversion) $ 60,400 Costs added during June Direct materials, 32,000 units 368,000 Direct labor 244,000 Factory overhead 188,000 Total cost to be accounted for $860,400 During June, a total of 31,200 units were completed and transferred out to finished goods. Also, 32,000 units were placed into production during the month of June. On June 30, the inventory of work in process consisted of 4,600 units which were 40% completed. Inventories are costed by the first-in, first-out method and all materials are added at the beginning of the process. Determine the following, presenting your computations: (a) the number of equivalent units for Conversion for production (b) conversion cost per equivalent unit and material cost per equivalent unit. (c) total cost for all finished goods completed during the month of June (d) total cost of work in process inventory at June 30 (a) (b) (c) (d)
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.
The inventory at June 1 and the costs charged to Work in Process - Department “23” during the month of June are as follows:
Inventory in process, June 1
|
3,800 units, 80% completed ($25,000 Materials; $35,400 conversion) |
$ 60,400 |
|
Costs added during June |
|
|
Direct materials, 32,000 units |
368,000 |
|
Direct labor |
244,000 |
|
Factory |
188,000 |
|
Total cost to be accounted for |
$860,400 |
During June, a total of 31,200 units were completed and transferred out to finished goods. Also, 32,000 units were placed into production during the month of June. On June 30, the inventory of work in process consisted of 4,600 units which were 40% completed. Inventories are costed by the first-in, first-out method and all materials are added at the beginning of the process.
Determine the following, presenting your computations:
|
(a) |
the number of equivalent units for Conversion for production |
|
(b) |
conversion cost per equivalent unit and material cost per equivalent unit. |
|
(c) |
total cost for all finished goods completed during the month of June |
|
(d) |
total cost of work in process inventory at June 30 |
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
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