ena Company employs FIFO process costing system concerning its only product which undergoes production in assembly department and finishing department. The following data for the year ended December 31, 2020 are provided: ASSEMBLY DEPARTMENT Units Cost January 1, 2020 100,000 units – 40% completed as to conversion cost DM – P3M DL – P5M FOH – P2M December 31, 2020 150,000 units – 80% completed as to conversion costs ? Units started during the year 400,000 units DM cost added during 2020 – P12M DL cost added during 2020 – P15M FOH cost added during 2020 – P13M FINISHING DEPARTMENT January 1, 2020 50,000 units – 70% incomplete as to conversion cost Transferred In – P10M DM – P6M DL – P1M FOH – P3M December 31, 2020 30,000 units – 10% incomplete as to conversion costs ? Units started during the year ? DM cost added during 2020 – P30M DL cost added during 2020 – P40M FOH cost added during 2020 – P10M Additional Information: • It is the company policy to apply direct labor and factory overhead uniformly throughout the period in the two departments. • It is the company policy to add all direct materials in the assembly department at the start of the process while all direct materials in the finishing department are added at the end of the process. • There is no spoilage in both departments. (Round off Units Costs into two decimal places.) 3. In the assembly department, what is the cost of goods manufactured or cost assigned to units completed for the year ended December 31, 2020? a. 37,687,200 b. 38,763,400 c. 36,451,200 d. 35,523,800 4. In the assembly department, what is the cost assigned to December 31, 2020 work-in-process inventory? a. 12,314,400 b. 11,236,600 c. 13,548,800 d. 14,476,200 5. In the finishing department, what is the cost of goods manufactured or cost assigned to units completed for the year ended December 31, 2020? a. 130,923,150 b. 129,235,750 c. 131,285,400 d. 128,452,100 6. In the finishing department, what is the cost assigned to December 31, 2020 work-in-process inventory? a. 6,764,430 b. 8,541,450 c. 6,401,800 d. 9,235,100
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.
Items 3 – 6
Cena Company employs FIFO
production in assembly department and finishing department. The following data for the year ended
December 31, 2020 are provided:
ASSEMBLY DEPARTMENT
Units Cost
January 1, 2020 100,000 units – 40%
completed as to conversion
cost
DM – P3M
DL – P5M
FOH – P2M
December 31, 2020 150,000 units – 80%
completed as to conversion
costs
?
Units started during the
year 400,000 units
DM cost added during 2020 – P12M
DL cost added during 2020 – P15M
FOH cost added during 2020 – P13M
FINISHING DEPARTMENT
January 1, 2020 50,000 units – 70% incomplete
as to conversion cost
Transferred In – P10M
DM – P6M
DL – P1M
FOH – P3M
December 31, 2020 30,000 units – 10% incomplete
as to conversion costs
?
Units started during the
year ?
DM cost added during 2020 – P30M
DL cost added during 2020 – P40M
FOH cost added during 2020 – P10M
Additional Information:
• It is the company policy to apply direct labor and factory overhead uniformly throughout the
period in the two departments.
• It is the company policy to add all direct materials in the assembly department at the start of the
process while all direct materials in the finishing department are added at the end of the process.
• There is no spoilage in both departments. (Round off Units Costs into two decimal places.)
3. In the assembly department, what is the cost of goods
completed for the year ended December 31, 2020?
a. 37,687,200
b. 38,763,400
c. 36,451,200
d. 35,523,800
4. In the assembly department, what is the cost assigned to December 31, 2020 work-in-process
inventory?
a. 12,314,400
b. 11,236,600
c. 13,548,800
d. 14,476,200
5. In the finishing department, what is the cost of goods manufactured or cost assigned to units
completed for the year ended December 31, 2020?
a. 130,923,150
b. 129,235,750
c. 131,285,400
d. 128,452,100
6. In the finishing department, what is the cost assigned to December 31, 2020 work-in-process inventory?
a. 6,764,430
b. 8,541,450
c. 6,401,800
d. 9,235,100
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