ACCOUNT Work in Process-Forging Department ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 1 Bal., 3,400 units, 70% completed Nov. 38,080 30 Direct materials, 31,000 units 294,500 332,580 30 Direct labor 28,000 360,580 30 Factory overhead 38,675 399,255 30 Goods finished, ? units 30 Bal., 2,700 units, 90% completed
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.
Costs per Equivalent Unit and Production Costs
The following information concerns production in the Forging Department for November. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $33,320 of direct materials.
LOOK AT IMAGE TO help solve D. and E
Cost per equivalent units of $9.50 for Direct Materials and $2.10 for Conversion Costs.
Based on the above data, determine each of the following amounts.
If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar.
a. Cost of beginning work in process inventory completed in November.
$ 40222
b. Cost of units transferred to the next department during November.
$ 368502
c. Cost of ending work in process inventory on November 30.
$30753
d. Costs per equivalent unit of direct materials and conversion included in the November 1 beginning work in process. If required, round your answers to two decimal places.
| Direct materials cost per equivalent unit | $ |
| Conversion cost per equivalent unit | $ |
e. The November increase or decrease in costs per equivalent unit for direct materials and conversion from the previous month. If required, round your answers to two decimal places.
| Increase or Decrease | Amount | |
| Change in direct materials cost per equivalent unit | Decrease | $ |
| Change in conversion cost per equivalent unit | Increase | $ |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
