ACC2200 Study Guide - Final Guide: Weighted Arithmetic Mean, Management Accounting

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goldcrocodile909

8 Aug 2018

School

Monash University

Department

Business - Accounting

Course

ACC2200

Professor

Prabanga Thoradeniya

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Document Summary

Hybrid costing = a combination of job and process costing. Job costing accumulates all jobs in the one wip inventory. Process costing accumulates each department"s cost in a process cost report. 2 main steps- 1) estimate the cost of the production process and 2) calculate the average cost per unit (cost of the process number of units produced) Process costing becomes more complex when there are wip accounts. You can"t just average the cost if some products aren"t fully completed. When wip exists, we need to take into account units started in the previous period (beginning wip), units started and completed during the period and units started but not completed this period (ending wip). Dm is added at specific stages during the production process. Unless the q states otherwise, assume 100% of dm is added at the start of production. Beginning wip and ending wip are converted to equivalent units for costing purposes.

Related Questions

A business makes one product that passes through a single process.

This business uses weighted average costing. The details of the process for the last period are as follows;

Materials.................................$98,000

Labour ....................................$60,000

Production overheads..............$39,000

Units added to the process.....1000

There were 200 units of opening WIP which are valued as follows;

Materials................................$22,000

Labour ...................................$ 6,960

Production overheads............$3,000

There were 300 units of closing WIP fully completed as to materials but only 60% complete for labour and 50% complete for overheads. There were no process losses.

Required:

(a) Calculate the cost to be assigned to completed output for the period

(b) Why is it necessary to calculate equivalent units?

coralmole212

Carolina Manufacturing builds dog creates. Each dog create passes through the Assembly Department and the Quality Dept. You only need to look at the Assembly Department for this problem. The process accounting system at Carolina. has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Conversion costs are added evenly during the process. When the Assembly Dept finished work on each dog crate, it is immediately transferred to Quality.

Carolina uses the Weighted Average Cost Method of process costing. Data for the Assembly Department during July 2018 is:

Physical Units Direct Conversion
(Dog Crates) Materials Costs

Work-in-process, July 1* 7,000 $1,325,000 $505,500
Started during July 2018 25,000
Completed during July 2018 31,000
Work-in-process July 30** ?
Total costs added during
July 2018 $4,750,000 $2,678,000

*Degree of completion: DM 60%; CC 70%
**Degree of completion: DM 80%; CC 90%

You will need to complete the following:

a) Compute equivalent units in the Assembly Dept.

b) For each cost category, calculate the cost per equivalent unit.

c) Assign total costs to units completed and transferred out and to units in ending Work in Process

d) Prepare the journal entry to move costs from WIP-Assembly Department to the WIP- Quality Department

blushmole199

Falcon Incorporated procures fish and then makes them into fillets and then prepares the fish fillets for distribution. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to non-detectible defects. Inspection occurs when units are 50% converted. Spoiled fillets generally constitute 5% of the good fillets. Falcon utilizes the First-In, First-Out Method of Process Costing. The records from June 2018 indicate the following:

WIP, beginning inventory 6/1/2018 75,000 fillets
Direct materials (100% complete)
Conversion costs (40% complete)
Started during June 153,950 fillets
Completed and transferred out 6/30/2018 115,000 fillets
WIP, ending inventory 6/30/2018 32,000 fillets
Direct materials (100% complete)
Conversion costs (20% complete)

Costs for June:
WIP, beginning Inventory:
Direct materials $ 150,000
Conversion costs 97,910
Direct materials added 305,000
Conversion costs added 393,130

a) What is the number of total spoiled units?
b) Normal spoilage units totals ________
c) Abnormal spoilage units totals ________
d) What is the total cost per equivalent unit using the first-in first-out method of process costing for Direct Materials?
e) What cost is allocated to abnormal spoilage using the first-in first-out process-costing method?
f) What is the amount of direct materials and conversion costs assigned to ending work in process using the first-in first-out process-costing method?

copperchinchilla610

ACC2200 Study Guide - Final Guide: Weighted Arithmetic Mean, Management Accounting

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