Prepare a schedule that computes the standard costs of direct labor in each production department. Standard direct-labor cost: Standard quantity Standard rate Standard cost per guitar Actual output in July Total standard cost of direct labor in July DIRECT LABOR Construction Department hour per hour per guitar guitars Finishing Department hour per hour per guitar guitars
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
1. Prepare a schedule that computes the
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- Lacy, Inc., produces a subassembly used in the production of hydraulic cylinders. The subassemblies are produced in three departments: Plate Cutting, Rod Cutting, and Welding. Materials are added at the beginning of the process. Overhead is applied using the following drivers and activity rates: Other data for the Plate Cutting Department are as follows: Required: 1. Prepare a physical flow schedule. 2. Calculate equivalent units of production for: a. Direct materials b. Conversion costs 3. Calculate unit costs for: a. Direct materials b. Conversion costs c. Total manufacturing 4. Provide the following information: a. The total cost of units transferred out b. The journal entry for transferring costs from Plate Cutting to Welding c. The cost assigned to units in ending inventoryPBB Company manufactures high end product. Because of the high volume of this type of product, the company employs a process cost system using the weighted average method to determine costs. Product Parts are manufactured in the Molding Department and transferred to the assembly Department were they are partially assembled. After assembly, the product is sent to packaging department. Cost per unit data for the high end product has been completed through the Molding department. Annual cost and production figures for the assembly Department are presented below: Production Data Beg. Inventory 50% Complete as to Assembly materials; 20% complete 3,000 as to Conversion units 45,000 Transferred In during the year units 40,000 Transferred to Packaging Department units 4,000 Ending Inventory 80% complete units Cost Data: Transferred-In Materials Conversion Current Period P 1,240,800 P 97,020 P 236,470 Work in Process, beginning 82,200 6,660 11,930 Damage product are identified on inspection…Time Clock Shop manufactures clocks on an automated assembly line. It utilizes two cost categories: direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of production, while conversion costs are allocated evenly throughout production. The company uses weighted-average costing. Data for the Assembly Department are given in the table. (Click the icon to view the table.) What is the total amount debited to the work-in-process account during the month of June at Time Clock Shop? A. $450,000 B. $2,270,000 C. $3,250,000 D. $2,000,000 E. $2,450,000 Table Work in process, beginning inventory Direct materials (100% complete) Conversion costs (50% complete) Units started during June Work in process, ending inventory Direct materials (100% complete) Conversion costs (75% complete) Work in process, beginning inventory Direct materials Conversion costs Direct materials costs added during…
- Springsteen Company manufactures guitars. The company uses a standard, job-order cost-accounting system in two production departments. In the Construction Department, the wooden guitars are built by highly skilled craftsmen and coated with several layers of lacquer. Then the units are transferred to the Finishing Department, where the bridge of the guitar is attached and the strings are installed. The guitars also are tuned and inspected in the Finishing Department. The diagram below depicts the production process. Each finished guitar contains seven pounds of veneered wood. In addition, one pound of wood is typically wasted in the production process. The veneered wood used in the guitars has a standard price of $14 per pound. The other parts needed to complete each guitar, such as the bridge and strings, cost $17 per guitar. The labor standards for Springsteen’s two production departments are as follows:Construction Department: 5 hours of direct labor at $21 per hourFinishing…Zia Company makes flowerpots from recycled plastic in two departments, Molding and Packaging. Zia uses the weighted average method, and units completed in the Molding department are transferred to the Packaging department. Production unit Information for the Molding department follows. Molding-Direct Materials Beginning work in process inventory Units started this period Ending work in process inventory Production cost Information for the Molding department for the same period follows. Units Beginning work in process inventory (direct materials) Direct materials added this period 3,900 27,500 3,000 (b) Equivalent units of production (c) Cost per equivalent unit of production Percent Complete 70% QS 16-18 (Algo) Weighted average: Computing equivalent units and cost per EUP (direct materials) LO P1 80% Compute the Molding department's (a) units completed and transferred out, (b) equivalent units of production for direct materials, and c) cost per equivalent unit of production for direct…Muskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February: Beginning inventories: Molding Assembly Physical units 10,000 8,000 Costs: Transferred in — $ 45,400 Direct materials $22,000 — Conversion costs $13,800 $ 16,700 Current production: Units started 25,000 30,000 Units transferred out 30,000 35,000 Costs: Transferred in —…
- Muskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February: Required: 1. Using the weighted average method, prepare the following for the Molding Department: a. A physical flow schedule b. An equivalent units calculation c. Calculation of unit costs. Round to four decimal places. d. Cost of ending work in process and cost of goods transferred out e. A cost reconciliation 2 Prepare journal entries that show the flow of…Muskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February: Molding Assembly Beginning inventories: Physical units 10,000 8,000 Costs: Transferred in $ 45,400 Direct materials $22,000 | Conversion costs $13,800 S 16,700 Current production: Units started 25,000 ? Units transferred out 30,000 35,000 Costs: Transferred in ? | Direct materials $ 56,250 $ 40,250 Conversion costs $103,500 $142,845 Percentage of completion: Beginning inventory 40% 55% Ending inventory 80 50Kremel Company uses a process-costing system. The company manufactures a product that is processed in two departments: molding and assembly. In the molding department, direct materials are added at the beginning of the process; in the assembly department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for March: Required:1. Using the Weighted average cost method, prepare the following for the molding department: a. A physical flow schedule b. An equivalent units calculation c. Calculation of unit costs d. Cost of ending work in process and cost of goods transferred out e. A cost reconciliation2. Prepare journal entries that show the flow of manufacturing costs for the molding department.
- Kremel Company uses a process-costing system. The company manufactures a product that is processed in two departments: molding and assembly. In the molding department, direct materials are added at the beginning of the process; in the assembly department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for March: Required:1. Using the FIFO method, prepare the following for the assembly department: a. A physical flow schedule b. An equivalent units calculation c. Calculation of unit costs d. Cost of ending work in process and cost of goods transferred out e. A cost reconciliation2. Prepare journal entries that show the flow of manufacturing costs for the assembly department.Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 4.20 per part Manufacturing supervision Hours of machine time $ 14.98 per hour Assembly Number of parts $ 4.20 per part Machine setup Each setup $ 57.40 per setup Inspection and testing Logged hours $ 46.40 per hour Packaging Logged hours $ 20.40 per hour LCI currently sells the B-13 model for $5,825 and the F-32 model for $6,260. Manufacturing costs and activity usage for the two products are as follows: B-13 F-32 Direct materials $ 165.40 $ 76.32 Number of parts 178.00 138 Machine hours 8.80…Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 3.20 per part Manufacturing supervision Hours of machine time $ 14.88 per hour Assembly Number of parts $ 3.70 per part Machine setup Each setup $ 56.90 per setup Inspection and testing Logged hours $ 45.90 per hour Packaging Logged hours $ 19.90 per hour LCI currently sells the B-13 model for $3,575 and the F-32 model for $3,460. Manufacturing costs and activity usage for the two products are as follows: B-13 F-32 Direct materials $ 164.90 $ 75.92 Number of parts 168 128 Machine hours 8.30 4.28…