PAN CORPORATION
PAN CORPORATION produces toy chairs for young children. Plastic pieces are molded in the plastics department. These pieces are transferred to the assembly department, where additional work is done. Units completed in the Assembly Department are transferred to Finished Goods.
Plastics Department
The direct materials are added in the plastics department at the beginning of the process. In the month of February beginning inventory is 80% complete as to conversion costs and ending inventory is 25% complete as to conversion costs. Following are data for February:
Beginning inventory costs for the plastics department:
Direct materials $2,000
Conversion costs 1,600
Total $3,600
Costs incurred in the plastics department during February:
Direct materials $18,000
Conversion costs 16,000
Total $34,000
Physical units in the plastics department
Units in beginning inventory 2,000
Units transferred-in during August 18,000
Total units transferred out 15,000
Units in ending inventory ?
The company uses weighted average.
Required:
What is the difference between job order costing and process costing?
All questions below relate to the Plastics Department:
Compute the equivalent units and the cost per equivalent unit for February.
If materials are added at the end of the period, compute the equivalent units and costs per equivalent unit for February.
If materials are added at the 20% point, compute the equivalent units.
Why is that direct labor and overhead are combined into conversion costs in this problem?
PAN CORPORATION
PAN CORPORATION produces toy chairs for young children. Plastic pieces are molded in the plastics department. These pieces are transferred to the assembly department, where additional work is done. Units completed in the Assembly Department are transferred to Finished Goods.
Plastics Department
The direct materials are added in the plastics department at the beginning of the process. In the month of February beginning inventory is 80% complete as to conversion costs and ending inventory is 25% complete as to conversion costs. Following are data for February:
Beginning inventory costs for the plastics department:
Direct materials $2,000
Conversion costs 1,600
Total $3,600
Costs incurred in the plastics department during February:
Direct materials $18,000
Conversion costs 16,000
Total $34,000
Physical units in the plastics department
Units in beginning inventory 2,000
Units transferred-in during August 18,000
Total units transferred out 15,000
Units in ending inventory ?
The company uses weighted average.
Required:
What is the difference between job order costing and process costing?
All questions below relate to the Plastics Department:
Compute the equivalent units and the cost per equivalent unit for February.
If materials are added at the end of the period, compute the equivalent units and costs per equivalent unit for February.
If materials are added at the 20% point, compute the equivalent units.
Why is that direct labor and overhead are combined into conversion costs in this problem?