Bimbo Company, which uses the weighted average method, produces a product that passes through two departments: Mixing and cooking. In the Mixing Department, all materials are added at the beginning of the process. All other manufacturing inputs are added uniformly. The Following information pertains to the Mixing Department of February: a. Beginning work in process (BWIP), February 1: 100,000 pounds, 50% complete with respect to conversion costs. The costs assigned to this work are as follows: Materials RM 20,000 Labor RM 10,000 Overhead RM 30,000 b. Ending work in process (EWIP), February 28: 50,000 pounds, 50% complete with respect to conversion costs. c. Units completed and transferred out: 370,000 pounds. The following costs were added during the month: Materials RM 211,000 Labor RM 100,000 Overhead RM 270,000 Required: 1) Calculate unit completed and transferred out 2) Calculate equivalent unit of production for the Bimbo Company 3) Calculate unit cost for materials and conversion.
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.
Bimbo Company, which uses the weighted average method, produces a product that passes through two
departments: Mixing and cooking. In the Mixing Department, all materials are added at the beginning of
the process. All other manufacturing inputs are added uniformly. The Following information pertains to the
Mixing Department of February:
a. Beginning work in process (BWIP), February 1: 100,000 pounds, 50% complete with respect to
conversion costs. The costs assigned to this work are as follows:
Materials RM 20,000
Labor RM 10,000
Overhead RM 30,000
b. Ending work in process (EWIP), February 28: 50,000 pounds, 50% complete with respect to
conversion costs.
c. Units completed and transferred out: 370,000 pounds. The following costs were added during the
month:
Materials RM 211,000
Labor RM 100,000
Overhead RM 270,000
Required:
1) Calculate unit completed and transferred out
2) Calculate equivalent unit of production for the Bimbo Company
3) Calculate unit cost for materials and conversion.
4) Calculate the cost of units transferred out and the cost of ending inventory.
5) Prepare a cost reconciliation for the Bimbo.
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