ACC 312 Study Guide - Midterm Guide: Motor Oil, Weighted Arithmetic Mean, Execution Unit

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greenwalrus59

13 Nov 2017

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In process costing, costs are accumulated in processing departments: a separate departmental production report is compiled for each processing department. This report provides the details of how costs are assigned to units that pass through the department. Conversion costs: costs are accounted for by assigning them to, ending work in process inventory in the department, units transferred out to the next department (or to finished goods). In process costing, each unit is assigned the average cost of units processed through the department. To compute the average cost per unit in a department, two things must be known: the total cost, the total number of units processed, partially completed units are converted to equivalent (whole) units. For example, 200 units in ending inventory are 25% complete with respect to conversion costs. The two common methods of computing average costs per unit are the weighted- average method and the fifo method. The fifo method is covered in the chapter.

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Weighted Average Process Costing:
Minot Processing Company manufactures one product on acontinuous basis in two departments, Processing and Finishing. Allmaterials are added at the beginning of work on the product in theProcessing Department. During December 2009, the following eventsoccurred in the Processing Department:
Units started	16,000 units
Units completed and transferred to Finishing Department	15,000 units

Costs assigned to processing:Raw materials (one unit of rawmaterials for each unit of product started)	$142,900.00
Manufacturing supplies used	18,000
Direct labor costs incurred	51,000
Supervisors' salaries	12,000
Other production labor costs	14,000
Depreciation on equipment	6,000
Other production costs	18,000

Additional information follows:
Minot uses weighted average costing and applies manufacturingoverhead to Work-in-Process at the rate of 100 percent of directlabor cost.
Ending inventory in the Processing Department consists of 3,000units that are one-third converted.
Beginning inventory contained 2,000 units, one-half converted,with a cost of $34,500 ($24,500 for materials and $10,000 forconversion).
(a) Prepare a cost of production report for theProcessing Department for December.
Minot Processing Company: Processing Department Cost of Production Report For the Month Ending December 31, 2009
Summary of units in process:
Beginning
Units started
In process
Completed
Ending
Equivalent units in process:		Materials	Conversion	Total
Units completed
Plus equivalent units in ending inventory
Equivalent units in process
Total cost to be accounted for and cost per equivalent unit in process:
Beginning work-in-process		$	$	$
Current costs
Total cost in process		$	$	$
Equivalent units in process		+	+
Cost per equivalent unit in process		$	$	$
Accounting for total costs:
Transferred out				$
Ending work-in-process:
Materials			$
Conversion
Total cost accounted for				$
(b) Prepare an analysis of all changes inWork-in-Process.
Work-in-process:
Beginning			$
Current manufacturing costs:
Direct materials		$
Direct labor
Applied overhead
Total			$
Cost of goods manufactured
Ending			$

tealbuffalo667

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

In November, one of the processing departments at ShelpCorporation had beginning work in process inventory of $72,000 andending work in process inventory of $37,000. During the month, thecost of units transferred out from the department was $856,300.
Required:
Construct a cost reconciliation report for the department forthe month of November. (Input all amounts as positivevalues.)

Costs to be accounted for:

$



Total cost to be accounted for	$

Costs accounted for as follows:

$



Total cost accounted for	$

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ACC 312 Study Guide - Midterm Guide: Motor Oil, Weighted Arithmetic Mean, Execution Unit

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