quivalent Units and Related Costs; Cost of Production Report; Entries Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals. The balance in the account Work in Process—Filling was as follows on January 1: Work in Process—Filling Department (3,500 units, 80% completed): Direct materials (3,500 x $14.90) $52,150 Conversion (3,500 x 80% x $9.60) 26,880 $79,030 The following costs were charged to Work in Process—Filling during January: Direct materials transferred from Reaction Department: 45,200 units at $14.60 a unit $659,920 Direct labor 219,930 Factory overhead 211,314 During January, 44,800 units of specialty chemicals were completed. Work in Process—Filling Department on January 31 was 3,900 units, 40% completed. Required: 1. Prepare a cost of production report for the Filling Department for January. If an amount is zero, enter "0". If required, round your cost per equivalent unit answers to two decimal places. Dover Chemical Company Cost of Production Report-Filling Department For the Month Ended January 31 Unit Information Units charged to production: Inventory in process, January 1 Received from Reaction Department Total units accounted for by the Filling Department Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, January 1 Started and completed in January Transferred to finished goods in January Inventory in process, January 31 Total units to be assigned costs Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for January in Filling Department $ $ Total equivalent units Cost per equivalent unit $ $ Costs charged to production: Direct Materials Conversion Total Inventory in process, January 1 $ Costs incurred in January Total costs accounted for by the Filling Department $ Cost allocated to completed and partially completed units: Inventory in process, January 1 balance $ To complete inventory in process, January 1 $ $ Cost of completed January 1 work in process $ Started and completed in January Transferred to finished goods in January $ Inventory in process, January 31 Total costs assigned by the Filling Department $ Feedback 1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory. 2. Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the costs transferred from Filling to Finished Goods. (1) (2) Feedback 2. Remember that there are three types of inventory; materials, work in process, and finished goods. What costs are captured in the work in process account? Are these units 100% complete or are they being transferred to another department? 3. Determine the increase or decrease in the cost per equivalent unit from December to January for direct materials and conversion costs. If required, round your answers to two decimal places. Increase or Decrease Amount Change in direct materials cost per equivalent unit $ Change in conversion cost per equivalent unit
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.
Equivalent Units and Related Costs; Cost of Production Report; Entries
Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals.
The balance in the account Work in Process—Filling was as follows on January 1:
| Work in Process—Filling Department | ||
| (3,500 units, 80% completed): | ||
| Direct materials (3,500 x $14.90) | $52,150 | |
| Conversion (3,500 x 80% x $9.60) | 26,880 | |
| $79,030 |
The following costs were charged to Work in Process—Filling during January:
| Direct materials transferred from Reaction | ||
| Department: 45,200 units at $14.60 a unit | $659,920 | |
| Direct labor | 219,930 | |
| Factory overhead | 211,314 |
During January, 44,800 units of specialty chemicals were completed. Work in Process—Filling Department on January 31 was 3,900 units, 40% completed.
Required:
1. Prepare a cost of production report for the Filling Department for January. If an amount is zero, enter "0". If required, round your cost per equivalent unit answers to two decimal places.
| Dover Chemical Company | |||
| Cost of Production Report-Filling Department | |||
| For the Month Ended January 31 | |||
| Unit Information | |||
| Units charged to production: | |||
| Inventory in process, January 1 | |||
| Received from Reaction Department | |||
| Total units accounted for by the Filling Department | |||
| Units to be assigned costs: | |||
| Equivalent Units | |||
| Whole Units | Direct Materials | Conversion | |
| Inventory in process, January 1 | |||
| Started and completed in January | |||
| Transferred to finished goods in January | |||
| Inventory in process, January 31 | |||
| Total units to be assigned costs | |||
| Cost Information | |||
| Costs per equivalent unit: | |||
| Direct Materials | Conversion | ||
| Total costs for January in Filling Department | $ | $ | |
| Total equivalent units | |||
| Cost per equivalent unit | $ | $ | |
| Costs charged to production: | |||
| Direct Materials | Conversion | Total | |
| Inventory in process, January 1 | $ | ||
| Costs incurred in January | |||
| Total costs accounted for by the Filling Department | $ | ||
| Cost allocated to completed and partially completed units: | |||
| Inventory in process, January 1 balance | $ | ||
| To complete inventory in process, January 1 | $ | $ | |
| Cost of completed January 1 work in process | $ | ||
| Started and completed in January | |||
| Transferred to finished goods in January | $ | ||
| Inventory in process, January 31 | |||
| Total costs assigned by the Filling Department | $ |
1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.
2.
| (1) | |||
| (2) | |||
2. Remember that there are three types of inventory; materials, work in process, and finished goods. What costs are captured in the work in process account? Are these units 100% complete or are they being transferred to another department?
3. Determine the increase or decrease in the cost per equivalent unit from December to January for direct materials and conversion costs. If required, round your answers to two decimal places.
| Increase or Decrease | Amount | |
| Change in direct materials cost per equivalent unit | $ | |
| Change in conversion cost per equivalent unit |
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