At Grey Corporation, direct materials are added at the beginning of the process and conversion costs are added throughout the process. Data for the Finishing Department follows: WIP, April 1 2,200 units Transferred-in costs in WIP, April 1 $9,520 Direct materials (100%) in WIP, April 1 $2,420 Conversion costs (65%) in WIP, April 1 $2,010 Units transferred-in 3,800 Transferred-in costs during April $50,600 Units completed 3,300 April direct materials cost $15,550 April conversion costs $21,360 WIP, April 30 (100% for materials and 60% for conversion costs) 2,700 units Required: ⦁ What are the equivalent units for conversion costs? ⦁ What is the cost per equivalent unit for conversion costs? ⦁ What are the equivalent units for direct materials? ⦁ What are the total number of physical units for which to account?
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.
⦁ At Grey Corporation, direct materials are added at the beginning of the process and conversion costs are added throughout the process. Data for the Finishing Department follows:
WIP, April 1 2,200 units
Transferred-in costs in WIP, April 1 $9,520
Direct materials (100%) in WIP, April 1 $2,420
Conversion costs (65%) in WIP, April 1 $2,010
Units transferred-in 3,800
Transferred-in costs during April $50,600
Units completed 3,300
April direct materials cost $15,550
April conversion costs $21,360
WIP, April 30 (100% for materials and 60% for conversion costs) 2,700 units
Required:
⦁ What are the equivalent units for conversion costs?
⦁ What is the cost per equivalent unit for conversion costs?
⦁ What are the equivalent units for direct materials?
⦁ What are the total number of physical units for which to account?
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