Tuxedo Company has several processing departments. Costs charged to the Assembly Department for October 2019 totaled $1,298,400 as follows. Work in process, October 1 Materials $29,000 Conversion costs 16,500 $ 45,500 Materials added 1,006,000 Labor 138,900 Overhead 108,000 Production records show that 25,000 units were in beginning work in process 40% complete as to conversion cost, 435,000 units were started into production, and 35,000 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process. Instructions: a) Determine the equivalent units of production and the unit production costs for the Assembly Department. b) Determine the assignment of costs to goods transferred out and in process. c) Prepare a production cost report for the Assembly Department.
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.
Tuxedo Company has several processing departments. Costs charged to the Assembly
Department for October 2019 totaled $1,298,400 as follows.
Work in process, October 1
Materials $29,000
Conversion costs 16,500 $ 45,500
Materials added 1,006,000
Labor 138,900
Overhead 108,000
Production records show that 25,000 units were in beginning work in process 40% complete
as to conversion cost, 435,000 units were started into production, and 35,000 units were in
ending work in process 40% complete as to conversion costs. Materials are entered at the
beginning of each process.
Instructions:
a) Determine the equivalent units of production and the unit production costs for the
Assembly Department.
b) Determine the assignment of costs to goods transferred out and in process.
c) Prepare a production cost report for the Assembly Department.
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