ACC* - Accounting ACC* M115 Lecture Notes - Lecture 14: Weighted Arithmetic Mean, Root Mean Square, Income Statement

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redminnow421

6 Jun 2020

School

CCC

Department

ACC* - Accounting

Course

ACC* - Accounting ACC* M115

Professor

Murphy

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Document Summary

Fifo assumed that all units from the previous (higher cost units for example) in beginning wip are the rst to be completed and transferred out and that ending wip consists of only the lower cost current period units. Weighted average smooths out the cost per equivalent unit by assuming that more lower cost units are transferred out and some higher cost remain in ending wip. Managers use information from process costing systems to make pricing and product mix decisions and understand how well a rm"s processes are performing. Fifo provides managers with information about changes in the costs per unit from one period to the next. In a period of rising prices, the weighted average method will decrease taxes because cost of goods sold will be higher and operating income lower. Costs incurred in previous departments that are carried forward as the product"s cost when it moves to a subsequent process in the production cycle.

Related Questions

Yarmouth Company produces a liquid solvent in two departments: Mixing and Finishing. Accounting records at Yarmouth show the following information for Finishing operations for February (no new material is added in the Finishing Department):


WIP inventoryâFinishing
Beginning inventory (10,200 units, 20% complete with respect to Finishing costs)
Transferred-in costs (from Mixing)	$	113,520
Finishing conversion costs		3,493
Current work (98,400 units started)
Mixing costs		885,600
Finishing costs		417,732

The ending inventory has 14,200 units, which are 50 percent complete with respect to Finishing Department costs and 100 percent complete for Mixing Department costs.

Required:

Complete the production cost report using the weighted-average method. (Round "Cost per equivalent unit" to 2 decimal places.)

	Physical units	Equivalent Units
		Mixing Department	Finishing Department
Flow of Units:
Units to be accounted for:
Begginning WIP inventory	?
Units started this period	?
Total units to account for
Units accounted for:
Completed and transferred out	?	?	?
Units in ending inventory	?
Mixing		?
Finishing			?
Total units accounted for

	Total	Mixing Department	Finishing Department
Flow of costs:
Costs to be accounted for:
Costs in beginning WIP inventory	?	?	?
Current period costs	?	?	?
Total costs to be accounted for
Cost per equivalent unit
Mixing		?
Finishing			?
Cost accounted for:
Costs assigned to units transferred out	?	?	?
Costs of ending WIP inventory	?	?	?
Total cost accounted for

*Only in the question marks belong the answers.*

harlequinporcupine708

Equivalent Units, Cost per Equivalent Unit, ApplyingCosts.

Dixon Co. manufactures a product that goes through twodepartments prior to completion. The following information isavailable about work in the first department, the Mixing Departmentduring June:

Percent Completed

Units Materials Conversion

WIP,beginning 70,000 70% 40%

Started into production 460,000

Completed and

transferredout 450,000

WIP,ending 80,000 75% 25%

Materials Conversion

WIP,beginning $36,550 $ 13,500

Costs added duringJune $391,850 $287,300

Using the Weighted-Average method:

(1) Account for the actual physical units

(2) Determine the Equivalent Units for June for the firstprocess.

(3) Compute the costs per Equivalent Unit for June.

(4) Determine the total cost of ending Work in Process inventoryand the total cost of units transferred to the next process inJune.

(5) Reconcile the total costs assigned to the ending WIPinventory and the units transferred out with the costs in beginninginventory and the costs added during the period.

olivesardine984

Kansas Supplies is a manufacturer of plastic parts that uses the weighted-average process costing method to account for costs of production. It produces parts in three separate departments: Molding, Assembling, and Packaging. The following information was obtained for the Assembling Department for the month of April.

Work in process on April 1 had 75,000 units made up of the following:

	Amount		Degree of Completion
Prior department costs transferred in from the Molding Department	$	192,000		100	%
Costs added by the Assembling Department
Direct materials	$	120,000		100	%
Direct labor		43,200		60	%
Manufacturing overhead		27,600		50	%
	$	190,800
Work in process, April 1	$	382,800

During April, 375,000 units were transferred in from the Molding Department at a cost of $960,000. The Assembling Department added the following costs:


Direct materials	$	576,000
Direct labor		216,000
Manufacturing overhead		113,400
Total costs added	$	905,400

Assembling finished 300,000 units and transferred them to the Packaging Department.

At April 30, 150,000 units were still in work-in-process inventory. The degree of completion of work-in-process inventory at April 30 was as follows:


Direct materials	90	%
Direct labor	70
Manufacturing overhead	35

Required:

a. Prepare a production cost report using the weighted-average method. (Round "Cost per equivalent unit" to 2 decimal places.)

KANSAS SUPPLIES
Assembling Department
Production Cost ReportâWeighted-Average
Flow of Production Units
	Physical units
Units to be accounted for:
Beginning WIP inventory
Units started this period
Total units to be accounted for

	DETAILS
	Total Costs	Prior Department Costs	Materials	Labor	Manufacturing Overhead
Costs to be accounted for:
Costs in beginning WIP inventory
Current period costs
Total costs to be accounted for

Cost per equivalent unit:
Prior department costs
Materials
Labor
Manufacturing overhead

Costs accounted for:
Costs assigned to units transferred out:
Prior department costs
Materials
Labor
Manufacturing overhead
Total costs of units transferred out
Costs assigned to ending WIP inventory:
Prior department costs
Materials
Labor
Manufacturing overhead
Total ending WIP inventory
Total costs accounted for

yellowseal74

ACC* - Accounting ACC* M115 Lecture Notes - Lecture 14: Weighted Arithmetic Mean, Root Mean Square, Income Statement

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