AFM102 Chapter Notes - Chapter 6: Indian Railways, Finished Good, Production Schedule

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OC2146671

31 Jan 2018

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM102

Professor

Catherine Wong

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Document Summary

Same basic purposes: assign materials, labour, and overhead costs to products and provide a mechanism for computing unit costs. Same basic manufacturing accounts: manufacturing overhead, raw materials, wip, finished goods. Flow of costs in manufacturing accounts is the same. Summarizes number of units moving through the department in a period. Shows what costs were charged to a department and how they were disposed. Journal entry to record materials using in other processing departments. Ra(cid:449) (cid:373)aterials xxx: labour costs, traced to departments, not individual jobs. Ma(cid:374)ufacturi(cid:374)g o(cid:448)erhead xxx: completing the cost flows, product units are transferred to the next department for further processing when completed, transfer costs of partially completed units from one department to another. Wip mixi(cid:374)g xxx: costs of completed units are transferred to the finished goods inventory account. Wip filli(cid:374)g xxx: customer" order is filled and units are sold. Weighted-average method: equivalent units of production = units transferred to the next department or to finished goods +

Related Questions

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

Douglas Toys is a manufacturer that uses FIFO costing method toaccount for costs of production. It produces a plastic toy in threeseparate departments: Molding, Assembling, and Finishing. Thefollowing information was obtained for the Assembling Departmentfor the month of September.

Work in process on September 1 had120,000 units made up of the following:

Amount

Degree ofCompletion

Prior departmentcosts transferred in from the Molding Department

178,800

100

Costs added by theAssembling Department

Manufacturing overhead

32,520

187,240

Work in process,September 1

366,040

During September, 520,000 unitswere transferred in from the Molding Department at a cost of$774,800. The Assembling Department added the following costs:

Manufacturingoverhead

161,880

Total costsadded

836,200

Assembling finished 420,000units and transferred them to the Finishing Department.

At September 30, 220,000 unitswere still in work-in-process inventory. The degree of completionof work-in-process inventory at September 30 was as follows:

Direct materials90%

Directlabor80

Manufacturingoverhead30

Required:

(a)

Prepare a production cost report using FIFO. (Round youranswer to 2 decimal places.)

DOUGLAS TOYS
Assembling Department
Production Cost ReportâFIFO
Flow of Production Units	COMPUTE EQUIVALENT UNITS
	Physical Units	Prior Department Costs	Materials	Labor	Manufacturing Overhead
Units tobe accounted for:
BeginningWIP inventory
Unitsstarted this period
Totalunits to be accounted for	0
Unitsaccounted for:
Unitscompleted and transferred out:
Frombeginning inventory
Startedand completed currently
Units inending WIP inventory
Totalunits accounted for	0	0	0	0	0

Costs		DETAILS
	Total Costs	Prior Department Costs	Materials	Labor	Manufacturing Overhead
Costs tobe accounted for:
Costs inbeginning WIP inventory
Currentperiod costs
Totalcosts to be accounted	$0	$0	$0	$0	$0

Cost perequivalent unit:
Priordepartment costs
Materials
Labor
Manufacturing overhead

	DETAILS
	Total Costs	Prior Department Costs	Materials	Labor	Manufacturing Overhead
Costsaccounted for:
Costsassigned to units transferred out:
Costsfrom beginning WIP inventory
Currentcosts added to complete beginning WIP inventory:
Priordepartment costs
Materials
Labor
Manufacturing overhead
Totalcosts from beginning inventory	$0
Currentcosts of units started and completed:
Priordepartment costs
Materials
Labor
Manufacturing overhead
Totalcosts of units started and completed	$0
Totalcosts of units transferred out	$0
Costsassigned to ending WIP inventory:
Priordepartment costs
Materials
Labor
Manufacturing overhead
Totalending WIP inventory	$0
Total costs accounted for	$0	$0	$0	$0	$0

emeraldbutterfly445

Identify each statement as true or false. If false, indicate howto correct the statement.

1. Process cost systems are used to apply costs to similarproducts that are mass-produced in a continuous fashion.
2. A process cost system is used when each finished unit isindistinguishable from another.
3. Companies that produce soft drinks, motion pictures, andcomputers chips would all use process cost accounting.
4. In a process cost system, costs are tracked by individualjobs.
5. Job order costing and process costing track differentmanufacturing costs elements.
6. Both job order costing and process costing account for directmaterials, direct labor, and manufacturing overhead.
7. Costs flow through the accounts in the same basic way for bothjob order costing and process costing.
8. In a process cost system, only one work in process account isused.
9. In a process cost system, costs are summarized in a job costsheet.
10. In a process cost system, the unit cost is total manufacturingcosts for the period divided by the units produced during theperiod.

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AFM102 Chapter Notes - Chapter 6: Indian Railways, Finished Good, Production Schedule

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