ACCT 3121 Chapter : Chapter 17 Notes Student

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azuremammoth471

15 Mar 2019

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Identify the situations in which process-costing systems are appropriate. Understand the basic concepts of process costing and compute average unit costs. Describe the five steps in process costing and calculate equivalent units. Use the weighted-average method and first-in, first-out (fifo) method of process costing. Apply process-costing methods to situations with transferred-in costs. Understand the need for hybrid-costing systems such as operation costing. Process costing the unit cost of a product or service is obtained by assigning total. Terminology costs to many identical or similar units of output. Unite costs are calculated by dividing total costs incurred by the number of units of output from the production process: focus on end units, focus on cost components (beg. Wip and currently added): focus on when costs are added, focus on beg & end wip and % complete. Weighted-average (wa) process costing calculated equivalent unit and cost per.

Related Questions

Consider the following data for November 2014 from

Gray Manufacturingâ Company, which makes silk pennants and uses aâ process-costing system. All direct materials are added at the beginning of theâ process, and conversion costs are added evenly during the process. Spoilage is detected upon inspection at the completion of the process. Spoiled units are disposed of at zero net disposal value. Suppose Gray Manufacturing Company uses the FIFO method of process costing instead of theâ weighted-average method.

Physical Units	Direct	Conversion
	(Pennants)	Materials	Costs

Work inâ process, November 1	1,200	$1,103ââ	$711ââ
Started in November 20142014	â?
Good units completed and transferred out ââââduring November 2014	9,200
Normal spoilage	100
Abnormal spoilage	20
Work inâ process, November 30	1,900
Total costs added during November 2014		$13,026ââ	$26,446ââ

Superscript aaDegree ofâ completion: directâ materials,100â%; conversionâ costs,45â%.

Superscript bbDegree ofâ completion: directâ materials,100â%;conversionâ costs,35â%.

Requirement: Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule.

Physical
Flow of Production	Units
Work in process, beginning
Started during current period
To account for
Good units completed and transferred out during current period:
From beginning work in process
Started and completed
Normal spoilage
Abnormal spoilage
Work in process, ending
Accounted for
Equivalent units of work done in current period

		ââ	ââ





		ââ

aquamarinemanatee906

Please provide step by step solution for part B

Holding Co., a baker of European breads and pastries, uses aprocess-costing system. For its most popular selling item, you areprovided with the following selected information for the month ofNovember 2010.

Physical

Units % Complete

Beginning work in process 10,000 60%

Units completed 60,000

Ending work in process 20,000 40%

The beginning work in process inventory consisted of thefollowing:

Transferred-in costs $ 10,875

Direct materials 1,750

Direct labour 1,750

Overhead applied 1,050

The actual overhead costs incurred during the month were$15,500. Costs added during November were:

Transferred-in costs $ 69,125

Direct material 15,750

Direct labour 29,000

Overhead applied ?

When the process is 15% complete, 40% of the direct materialsare added with the remainder being added when the process is 50%complete. Conversion costs are incurred uniformly throughoutprocessing. Overhead is applied on the basis of direct labourcosts.

Required

a. By how much was overhead under- or over-applied duringNovember? (3 marks)

b. What was the cost of the units completed and transferred outto the next department during November

i) under the weighted-average method? (8 marks)

ii) under the FIFO method? (8 marks)

c. What was the weighted-average cost of the ending WIPinventory for November?

(3 marks)

d. Will using the FIFO method result in a higher or lower costper unit of ending WIP inventory? Why is there a difference betweenthe FIFO and weighted-average methods? Do not calculate theamount. (3 marks)

bronzecat779

Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May:


Production data:
Pounds in process, May 1; materials 100% complete; conversion 90% complete		81,000
Pounds started into production during May		460,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 80% complete; conversion 20% complete		55,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	158,200
Conversion cost	$	50,500
Cost added during May:
Materials cost	$	822,300
Conversion cost	$	277,520

Required:

1. Compute the equivalent units of production for materials and conversion for May.

2. Compute the cost per equivalent unit for materials and conversion for May.

3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May.

4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May.

5. Prepare a cost reconciliation report for May..... Please explain how to solve this? Thank you!

1. Compute the equivalent units of production for materials and conversion for May.

	Materials	Conversion
Equivalent units of production

2. Compute the cost per equivalent unit for materials and conversion for May. (Round your answers to 2 decimal places.)

	Materials	Conversion
Cost per equivalent unit

3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May. (Round your intermediate calculations to 2 decimal places.)

	Materials	Conversion	Total
Cost of ending work in process inventory

4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May. (Round your intermediate calculations to 2 decimal places.)

	Materials	Conversion	Total
Cost of units completed and transferred out

5. Prepare a cost reconciliation report for May. (Round your intermediate calculations to 2 decimal places.)

Cost Reconciliation
Costs to be accounted for:


Total cost to be accounted for
Costs accounted for as follows:


Total cost accounted for

cyansnake100

ACCT 3121 Chapter : Chapter 17 Notes Student

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