Required: (a) Compute the equivalent units and cost per equivalent units for direct materials (From Molding & Direct materials added) and conversion costs. (b) Compute the: - cost of the unexpected losses - total cost of the knobs completed and transferred out of the Packaging Department. - cost of ending work in process inventory in the Polishing Department (c) Complete the Work in Process Inventory – Polishing Process T-account, clearly showing the ending balance. (d) Prepare the journal entries for the: - assignment of direct materials, direct labor incurred and the manufacturing overhead applied to the Polishing Process - cost of the units completed and transferred out to the Packaging Process (e) Given that 30% of the unexpected losses were as a result of pilferage, calculate Fen Furnishings true loss associated with the Polishing Process.
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.
Required:
(a) Compute the equivalent units and cost per equivalent units for direct materials (From Molding &
Direct materials added) and conversion costs.
(b) Compute the:
- cost of the unexpected losses
- total cost of the knobs completed and transferred out of the Packaging Department.
- cost of ending work in process inventory in the Polishing Department
(c) Complete the Work in Process Inventory – Polishing Process T-account, clearly showing the ending
balance.
(d) Prepare the
- assignment of direct materials, direct labor incurred and the manufacturing
- cost of the units completed and transferred out to the Packaging Process
(e) Given that 30% of the unexpected losses were as a result of pilferage, calculate Fen Furnishings true loss associated with the Polishing Process.
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