Savannah Textiles Company manufactures a variety of natural fabrics for the clothing industry. The following data pertain to the Weaving Department for the month of September. Equivalent units of direct material (weighted-average method) ............60,000Equivalent units of conversion (weighted-average method) ...................52,000Units completed and transferred out during September ..........................50,000 The cost data for September are as follows:Work in process, September 1Direct material..................................................................................................... $ 94,000Conversion.................................................................................................................44,400Costs incurred during SeptemberDirect material.................................................................................................... $164,000Conversion...............................................................................................................272,800 There were 20,000 units in process in the Weaving Department on September 1 (100% complete as to direct material and 40% complete as to conversion).Required: Compute each of the following amounts using weighted-average process costing.1. Cost of goods completed and transferred out of the Weaving Department.2. Cost of the September 30 work-in-process inventory in the Weaving Department.3. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following data change: the costs incurred in September were $328,000 for direct material and $818,400 for conversion.
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.
Savannah Textiles Company manufactures a variety of natural fabrics for the clothing industry. The following data pertain to the Weaving Department for the month of September.
Equivalent units of direct material (weighted-average method) ............60,000
Equivalent units of conversion (weighted-average method) ...................52,000
Units completed and transferred out during September ..........................50,000
The cost data for September are as follows:
Work in process, September 1
Direct material..................................................................................................... $ 94,000
Conversion.................................................................................................................44,400
Costs incurred during September
Direct material.................................................................................................... $164,000
Conversion...............................................................................................................272,800
There were 20,000 units in process in the Weaving Department on September 1 (100% complete as to direct material and 40% complete as to conversion).
Required: Compute each of the following amounts using weighted-average
1. Cost of goods completed and transferred out of the Weaving Department.
2. Cost of the September 30 work-in-process inventory in the Weaving Department.
3. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following data change: the costs incurred in September were $328,000 for direct material and $818,400 for conversion.
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