To continue with no 4. Assume Sweet Corporation repacks the syrup into 1-liter cartons in the Packing Dept before it sells these to the candy factories. During the month of June it received the 8,000 gallons of syrup from the first department and completed production for 7,500 gallons in the second department. The costs of the resources used by Sweet consist of the following in the second department: Materials $25,200 and conversion cost of $49,920 including 30% applied overhead based on direct labor. It is estimated that the work in process is only 60% complete. Materials in the form of one liter cartons are applied at the end of the processing. Required: Compute for the cost of syrup completed and the cost of the syrup still in process at the end of June. If a gallon is equal to approximately 4 liters and predetermined selling price per liter is $15 per carton which is lower than the price of the competitor which is $18, will a GPR of 30% be achievable? Assume further that 15,000 cartons were delivered to the customers. Prepare a PCR for the second department. Compute for the GP and answer the question. Entries from Dept 1 transferred in cost up to the shipment of goods to customers and recording of sales revenue.
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.
To continue with no 4. Assume Sweet Corporation repacks the syrup into 1-liter cartons in the Packing Dept before it sells these to the candy factories. During the month of June it received the 8,000 gallons of syrup from the first department and completed production for 7,500 gallons in the second department. The costs of the resources used by Sweet consist of the following in the second department: Materials $25,200 and conversion cost of $49,920 including 30% applied overhead based on direct labor. It is estimated that the work in process is only 60% complete. Materials in the form of one liter cartons are applied at the end of the processing.
Required: Compute for the cost of syrup completed and the cost of the syrup still in process at the end of June. If a gallon is equal to approximately 4 liters and predetermined selling price per liter is $15 per carton which is lower than the price of the competitor which is $18, will a GPR of 30% be achievable? Assume further that 15,000 cartons were delivered to the customers.
- Prepare a PCR for the second department.
- Compute for the GP and answer the question.
- Entries from Dept 1 transferred in cost up to the shipment of goods to customers and recording of sales revenue.
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