Babson Company's inventory at October 1, and the costs charged to Work in Process—Department Bravo during October are as follows: 2,200 units, 60% completed $ 147,800 From Department Alpha, 36,000 units 945,000 Direct labor 412,000 Factory overhead 276,770 During October, all direct materials are transferred from Department Alpha, the units in process at October 1 were completed, and of the 36,000 units entering the department, all were completed except 2,000 units which were 60% completed as to conversion costs. All materials are added at the beginning of the process REQUIREMENT #1: Prepare a cost of production report for December using the FIFO Method (Round cost per equivalent unit to 4 decimal places, but the total amounts to nearest dollar.) REQUIREMENT #2: Prepare a cost of production report for December using the Weighted-Average Method
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.
Babson Company's inventory at October 1, and the costs charged to Work in Process—Department Bravo during October are as follows:
|
2,200 units, 60% completed |
$ 147,800 |
|
From Department Alpha, 36,000 units |
945,000 |
|
Direct labor |
412,000 |
|
Factory overhead |
276,770 |
During October, all direct materials are transferred from Department Alpha, the units in process at October 1 were completed, and of the 36,000 units entering the department, all were completed except 2,000 units which were 60% completed as to conversion costs. All materials are added at the beginning of the process
REQUIREMENT #1: Prepare a cost of production report for December using the FIFO Method (Round cost per equivalent unit to 4 decimal places, but the total amounts to nearest dollar.)
REQUIREMENT #2: Prepare a cost of production report for December using the Weighted-Average Method
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