Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,400 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $732,804 in total. The ending work in process inventory in January consisted of 3,600 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials Labor Overhead Cost per equivalent unit $ 14.00 $ 4.30 $ 8.00 Required: 1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month. 2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January. 3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January. 4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.) Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month. Materials Labor Overhead Equivalent units Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January. Materials Labor Overhead Total Cost of ending work in process inventory Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January. Materials Labor Overhead Total Cost of units completed and transferred out Prepare a cost reconciliation for January. Cost Reconciliation Total cost to be accounted for Costs accounted for as follows: Total cost accounted for $0
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.
Superior Micro Products uses the weighted-average method in its
| Materials | Labor | Overhead | |||||||
| Cost per equivalent unit | $ | 14.00 | $ | 4.30 | $ | 8.00 | |||
Required:
1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.
2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.
3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.
4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)
Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.
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Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.
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Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.
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Prepare a cost reconciliation for January.
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Process costing: Process costing is a method that is used to know the cost of a product at each stage of manufacturing. It is the method in which the cost of a product is determined on the basis of the different levels of production. Generally, most of the products are not completed by a single process, however, working is forwarded through many stages in order to make them saleable.
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