Gena Company has several processing departments. Costs charged to Department A or January 2020 were as follows. Work in process, January 1: Materials =$37,000 Conversion costs =$18,000 Costs added during the month: Materials $1,462,600 Labor $392,000 Overhead $127,240 Production records show that 25,000 units were in beginning work in process 40% complete as to conversion cost, 435,000 units were started into production, and 40,000 units were in ending work in process, 100% complete as to materials, and 60% complete as to conversion costs. Instructions: • Determine the physical and equivalent units of production • Determine the cost per equivalent unit for Department A • Determine the assignment of costs to goods transferred out and in ending work in process • Do a cost reconciliation. • Prepare the journal entry necessary to transfer the cost of the completed units from Department A to Department B.
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.
1. Gena Company has several processing departments. Costs charged to Department A or January 2020 were as follows.
Work in process, January 1: Materials =$37,000 Conversion costs =$18,000
Costs added during the month:
Materials $1,462,600
Labor $392,000
Overhead $127,240
Production records show that 25,000 units were in beginning work in process 40% complete as to conversion cost, 435,000 units were started into production, and 40,000 units were in ending work in process, 100% complete as to materials, and 60% complete as to conversion costs.
Instructions:
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