Equivalent Units of Production and Related Costs The charges to Work in Process—Baking Department for a period as well as information concerning production are as follows. The Baking Department uses the average cost method, and all direct materials are placed in process during production. Work in Process—Baking Department Bal., 3,100 units, 40% completed 8,091 To Finished Goods, 22,300 units ? Direct materials, 22,600 units 86,332 Direct labor 45,312 Factory overhead 23,343 Bal., 3,400 units, 60% completed ? If required, round cost per equivalent unit answer to two decimal places. a. Determine the number of whole units to be accounted for and to be assigned costs. b. Determine the number of equivalent units of production. c. Determine the cost per equivalent unit. d. Determine the cost of the units transferred to Finished Goods. e. 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.
Equivalent Units of Production and Related Costs
The charges to Work in Process—Baking Department for a period as well as information concerning production are as follows. The Baking Department uses the average cost method, and all direct materials are placed in process during production.
| Work in Process—Baking Department | |||
|---|---|---|---|
| Bal., 3,100 units, 40% completed | 8,091 | To Finished Goods, 22,300 units | ? |
| Direct materials, 22,600 units | 86,332 | ||
| Direct labor | 45,312 | ||
| Factory overhead | 23,343 | ||
| Bal., 3,400 units, 60% completed | ? |
If required, round cost per equivalent unit answer to two decimal places.
a. Determine the number of whole units to be accounted for and to be assigned costs.
b. Determine the number of equivalent units of production.
c. Determine the cost per equivalent unit.
d. Determine the cost of the units transferred to Finished Goods.
e. Determine the cost of units in ending Work in Process.
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