Moon Company produces baseball bats and cricket paddles. It has two departments that process all products – Cutting Department and Finishing Department. In Finishing Department, direct materials (DM) are added at the start of the process and conversion costs (CC) are added evenly during the process. Company is using Weighted Average method for the Finishing Department. During July, beginning work in process in the Finishing Department was 80% complete as to conversion. Beginning inventories included $30,800 for transferred-in costs, $13,200 for direct materials, and $27,500 for conversion costs. Ending inventory was 30% complete as to CC. Additional information about the Finishing Department follows: Finishing Beginning work-in-process units 26,400 Units transferred in this period 74,800 Units completed & transferred out 79,200 Ending work-in-process units 22,000 Material costs added $37,400 Conversion costs $75,460 Transferred-in costs $141,240 1. Compute total cost per unit. 2. Compute cost of units completed and transferred out in July.
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.
Moon Company produces baseball bats and cricket paddles. It has two departments that process all products – Cutting Department and Finishing Department.
In Finishing Department, direct materials (DM) are added at the start of the process and conversion costs (CC) are added evenly during the process. Company is using Weighted Average method for the Finishing Department.
During July, beginning work in process in the Finishing Department was 80% complete as to conversion. Beginning inventories included $30,800 for transferred-in costs, $13,200 for direct materials, and $27,500 for conversion costs. Ending inventory was 30% complete as to CC. Additional information about the Finishing Department follows:
|
|
Finishing |
|
Beginning work-in-process units |
26,400 |
|
Units transferred in this period |
74,800 |
|
Units completed & transferred out |
79,200 |
|
Ending work-in-process units |
22,000 |
|
|
|
|
Material costs added |
$37,400 |
|
Conversion costs |
$75,460 |
|
Transferred-in costs |
$141,240 |
1. Compute total cost per unit.
2. Compute cost of units completed and transferred out in July.
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