Kant Mfg uses process costing for their production. In September, they had the following production data from their first department: Units % Complete Costs Beginning WIP 200,000 35% $458,000 Units Completed & Transferred Out 910,000 100% Ending WIP 135,000 45% Materials Released Into Production: $875,000 Direct Labor Hours: 19,900 Direct Labor Rate: $29.00 Machine Hours Used: 12,500 Applied Overhead Rate: $15.50/Machine Hour Kant uses normal costing and applies overhead based on machine hours. Required: Calculate equivalent units of production for September Calculate the unit cost for September Calculate the value of units transferred out of the department for September
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.
Kant Mfg uses
|
|
Units |
% Complete |
Costs |
|
Beginning WIP |
200,000 |
35% |
$458,000 |
|
Units Completed & Transferred Out |
910,000 |
100% |
|
|
Ending WIP |
135,000 |
45% |
|
Materials Released Into Production: $875,000
Direct Labor Hours: 19,900
Direct Labor Rate: $29.00
Machine Hours Used: 12,500
Applied Overhead Rate: $15.50/Machine Hour
Kant uses normal costing and applies overhead based on machine hours.
Required:
- Calculate equivalent units of production for September
- Calculate the unit cost for September
- Calculate the value of units transferred out of the department for September
- Calculate the value of ending WIP for September
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