Cost per Equivalent Unit: Average Cost Method The following information concerns production in the Forging Department for April. The Forging Department uses the average cost method. ACCOUNT Work in Process—Forging Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit April 1 Bal., 2,300 units, 40% completed 11,704 30 Direct materials, 53,100 units 435,420 447,124 30 Direct labor 181,700 628,824 30 Factory overhead 99,600 728,424 30 Goods transferred, 52,800 units ? ? 30 Bal., 2,600 units, 60% completed ? a. Determine the cost per equivalent unit. Round your answer to the nearest cent. $ per equivalent unit b. Determine the cost of the units transferred to Finished Goods. $ c. Determine the cost of units in ending Work in 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.
Cost per Equivalent Unit: Average Cost Method
The following information concerns production in the Forging Department for April. The Forging Department uses the average cost method.
| ACCOUNT Work in Process—Forging Department | ACCOUNT NO. | ||||||||
| Date | Item | Debit | Credit | Balance | |||||
| Debit | Credit | ||||||||
| April | 1 | Bal., 2,300 units, 40% completed | 11,704 | ||||||
| 30 | Direct materials, 53,100 units | 435,420 | 447,124 | ||||||
| 30 | Direct labor | 181,700 | 628,824 | ||||||
| 30 | Factory overhead | 99,600 | 728,424 | ||||||
| 30 | Goods transferred, 52,800 units | ? | ? | ||||||
| 30 | Bal., 2,600 units, 60% completed | ? |
a. Determine the cost per equivalent unit. Round your answer to the nearest cent.
$ per equivalent unit
b. Determine the cost of the units transferred to Finished Goods.
$
c. Determine the cost of units in ending Work in Process.
$
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