Moncado Company manufactures a product that only has one production process. Direct materials are added at the beginning of the manufacturing process and no units are lost/wasted during production. Moncado uses the weighted average cost method in its process costing system. Here is some additional data about Moncado Company's Work In Process (WIP) inventory: January 1st units in WIP 182,000 units % complete conversion opening WIP 80% Material costs in opening WIP $ 181,762 Conversion costs in opening WIP $ 227,203 Units started during January 909,000 units Units completed and transferred to Finished Goods Inventory in January 772,000 units Direct material cost added during month $ 908,811 Conversion costs added during month $ 1,181,454 % complete conversion ending WIP 60% 1 Compute the equivalent units of production and the cost per equivalent unit for materials and for conversion costs. 2 Determine the costs to be transferred from the work in process inventory account to finished goods . 3 Determine the amount of cost that should be assigned to the ending work in process inventory.
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.
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Moncado Company manufactures a product that only has one production process. Direct materials are added at the |
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beginning of the manufacturing process and no units are lost/wasted during production. |
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Moncado uses the weighted average cost method in its |
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Here is some additional data about Moncado Company's Work In Process (WIP) inventory: |
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January 1st units in WIP |
182,000 |
units |
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% complete conversion opening WIP |
80% |
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Material costs in opening WIP |
$ 181,762 |
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Conversion costs in opening WIP |
$ 227,203 |
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Units started during January |
909,000 |
units |
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Units completed and transferred to Finished Goods Inventory in January |
772,000 |
units |
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Direct material cost added during month |
$ 908,811 |
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Conversion costs added during month |
$ 1,181,454 |
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% complete conversion ending WIP |
60% |
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1 |
Compute the equivalent units of production and the cost per equivalent unit for materials and for conversion costs. |
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2 |
Determine the costs to be transferred from the work in process inventory account to finished goods . |
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3 |
Determine the amount of cost that should be assigned to the ending work in process inventory. |
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