AFM481 Chapter Notes -General Ledger, Weighted Arithmetic Mean

40 views2 pages

orangecoyote929

6 Nov 2013

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM481

Professor

Grant Russell

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

Process costing assign product costs to mass-produced products. Purpose: assign costs to each unit of good/service. Production costs are traced to cost pools that reflect the production process (departments) and allocated to individual units in a two-stage process. Costs assigned to each dept, then allocated to all units that pass through the dept. Conversion cost = dl + production overhead costs. Dm and conversion costs are allocated separately incurred at diff points in the production process. Indirect materials and indirect labour are traced to depts through material and payroll records. Shared costs (rent, insurance) are allocated to departments. Use % of completion to calculate the cost allocation of partially completed units. First in, first out (fifo) method allocate the current period"s cost only to units that had work performed this period: cost per unit = cost / equiv units for total work performed.

Related Questions

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

Be Safe, Inc. manufactures car seatsin its Dallas plant. Each car seat passes through the Assembly Deptand the Testing Dept. This problem focuses on the Assembly Dept.the process-costing system at Be Safe, Inc. has a singledirect-cost category (direct materials) and a single indirect-costcategory (conversion costs). Direct materials are added at thebeginning of the process. Conversion costs are added evenly duringthe process. When the Assembly Dept finished work on each car seat,it is immediately transferred to Testing.

Be Safe, Inc. uses the FirstIn First Out Method of process costing.Data for the Assembly Dept for September 2014 is:

PhysicalUnits Direct Conversion

(CarSeats) Materials Costs

Work-in-process, Sep1* 5,000 $1,250,000 $402,750

Started during Sep2014 20,000

Completed during Sep 2014 22,500

Work-in-process Sep30** 2,500

Total costs added during

Oct2009 $4,500,000 $2,337,500

*Degree of completion: DM ?%; CC60%

**Degree of completion: DM ?%; CC70%

1.For each cost category; compute equivalent units in theAssembly Dept. Show

physical units in the first column of the schedule.

2. For each cost category, summarize total Assembly Dept costsfor Sep 2014 and

calculate the cost per equivalent unit.

3. Assign total costs to units completed and transferred out andto units in ending Work in Process

4. Prepare the journal entry to move costs from WIP-AssemblyDept to theWIP-

Testing Department.

blushmanatee276

part one

Which of the following would not be a characteristic in aProcess Costing System?

Select one:

A. Each department has its own WIP account

B. A product cost report accumulates costs in eachdepartment

C. DM, DL, and FOH are transferred directly to the finished goodaccount

D. Products physically move through each department

part 2

Dropping an unprofitable customer will always result inimmediate improvements in company profits.

True or False

part 3

In process costing, all product costs are accumulated in asingle Work in Process account until the goods have passed throughall production departments; the costs are then transferred toFinished Goods.

True of False

Part 4

Increasing the number of cost pools in an Activity-Based Costingsystem will almost always result in cost savings.

true or false

apricotsquirrel151

AFM481 Chapter Notes -General Ledger, Weighted Arithmetic Mean

Document Summary

Get access

Related Documents

AFM481 Chapter Notes -Subledger, Income Statement, Financial Statement

AFM481 Chapter Notes -Marginal Cost, Cost Driver, Service Canada

AFM481 Study Guide - Midterm Guide: Pro Rata, Finished Good

Related Questions