Enter the balance as of April 1 in a four-column account for Work in Process—Filling. Record the debits and credits in the account for April. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion; (b) cost per equivalent unit; (c) cost of goods finished, differentiating between units started in the prior period and units started and finished
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.
Work in Process Account Data for Two Months; Cost of Production Reports
Hearty Soup Co. uses a
| Bal., 600 units, 60% completed: | ||
| Direct materials (600 x $5.30) | $ 3,180 | |
| Conversion (600 x 60% x $2.20) | 792 | |
| $ 3,972 | ||
| From Cooking Department, 13,740 units | $74,196 | |
| Direct labor | 19,106 | |
| Factory overhead | 10,288 |
During April, 600 units in process on April 1 were completed, and of the 13,740 units entering the department, all were completed except 1,500 units that were 20% completed.
Charges to Work in Process—Filling for May were as follows:
| From Cooking Department, 15,800 units | $88,480 |
| Direct labor | 26,270 |
| Factory overhead | 14,146 |
During May, the units in process at the beginning of the month were completed, and of the 15,800 units entering the department, all were completed except 800 units that were 80% completed.
Required:
1. Enter the balance as of April 1 in a four-column account for Work in Process—Filling. Record the debits and credits in the account for April. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion; (b) cost per equivalent unit; (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in April; and (d) work in process inventory. If an amount box does not require an entry, leave it blank.
| ACCOUNT | Work in Process-Filling Department | ACCOUNT NO. | ||||
|---|---|---|---|---|---|---|
| BALANCE | ||||||
| DATE | ITEM | POST. REF. | DEBIT | CREDIT | DEBIT | CREDIT |
| Apr. 1 | Bal., 600 units, 60% completed | |||||
| 30 | Cooking Dept., 13,740 units at $5.40 | |||||
| 30 | Direct labor | |||||
| 30 | Factory overhead | |||||
| 30 | Finished goods | |||||
| 30 | Bal., 1,500 units, 20% completed |
If an amount box does not require an entry, leave it blank. Round cost per unit answers to the nearest cent.
| Hearty Soup Co. Cost of Production Report-Filling Department For the Month Ended April 30 |
|||
|---|---|---|---|
| Whole Units | Equivalent Units | ||
| Units | Direct Materials (a) | Conversion (a) | |
| Units charged to production: | |||
| Inventory in process, April 1 | |||
| Received from Cooking Department | |||
| Total units accounted for by the Filling Department | |||
| Units to be assigned costs: | |||
| Inventory in process, April 1 | |||
| Started and completed in April | |||
| Transferred to finished goods in April | |||
| Inventory in process, April 30 | |||
| Total units to be assigned costs |
| Costs | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Costs | Direct Materials | Conversion | Total | |||||||||
| Costs per equivalent unit: | ||||||||||||
| Total costs for April in Filling Department | ||||||||||||
| Total equivalent units | ||||||||||||
| Cost per equivalent unit (b) | ||||||||||||
| Costs charged to production: | ||||||||||||
| Inventory in process, April 1 | ||||||||||||
| Costs incurred in April | ||||||||||||
| Total costs accounted for by the Filling Department | ||||||||||||
| Cost allocated to completed and partially completed units: | ||||||||||||
| Inventory in process, April 1 balance (c) | ||||||||||||
| To complete inventory in process, April 1 (c) | ||||||||||||
| Cost of completed April 1 work in process | ||||||||||||
| Started and completed in April (c) | ||||||||||||
| Transferred to finished goods in April (c) | ||||||||||||
| Inventory in process, April 30 (d) | ||||||||||||
| Total costs assigned by the Filling Department |
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