Noora Company manufactures quality hair care product. The ingredients are combined in the mixing department and put in 16-ounce containers in the packaging department. The following information pertains to the mixing department for the month of May 2021: Table 1: Cost and Production Data for the Mixing Department for May Production: Units Units in process, May 1 (100% complete materials, 75% labor and overhead) 10,000 Started during May 50,000 Units in process, May 31 (100% complete materials, 50% labor and overhead) 8,000 Costs: RM Work in process, May 1 Materials 15,000 Direct labor 20,000 Manufacturing overhead 17,560 Total costs 52,560 Cost added during May Materials 90,000 Direct labor 120,000 Manufacturing overhead 100,000 Total costs 310,000 Noora Company had used the weighted-average method. Required: (a) Develop a physical flow schedule for the mixing department for the month of May. (b) Calculate the equivalent units of production for materials and conversion of the mixing department for the month of May. (c) Calculate the unit cost for materials and conversion of the mixing department for the month of May. (d) Calculate the costs of units transferred out and the cost of EWIP for the mixing department for the month of May. (e) Develop a cost reconciliation for the mixing department for the month of May
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.
Noora Company manufactures quality hair care product. The ingredients are combined in the
mixing department and put in 16-ounce containers in the packaging department. The
following information pertains to the mixing department for the month of May 2021:
Table 1: Cost and Production Data for the Mixing Department for May
Production: Units
Units in process, May 1
(100% complete materials, 75% labor and overhead) 10,000
Started during May 50,000
Units in process, May 31
(100% complete materials, 50% labor and overhead) 8,000
Costs: RM
Work in process, May 1
Materials 15,000
Direct labor 20,000
Manufacturing overhead 17,560
Total costs 52,560
Cost added during May
Materials 90,000
Direct labor 120,000
Manufacturing overhead 100,000
Total costs 310,000
Noora Company had used the weighted-average method.
Required:
(a) Develop a physical flow schedule for the mixing department for the month of May.
(b) Calculate the equivalent units of production for materials and conversion of the mixing
department for the month of May.
(c) Calculate the unit cost for materials and conversion of the mixing department for the
month of May.
(d) Calculate the costs of units transferred out and the cost of EWIP for the mixing
department for the month of May.
(e) Develop a cost reconciliation for the mixing department for the month of May.
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