are materials that have entered the production process
All direct materials are added at the beginning of the process. In November, the beginning work in process inventory was 420 units, which were 40 percent complete; the ending balance was 400 units, which were 70 percent complete. During November, 15,000 units were started into production. Although we don’t track production costs for each desk individually, we do use a process costing system that assigns costs to each batch of desks produced. This system enables us to calculate a cost per unit as the products move through the Assembly department. These three inventory accounts are used to record product cost information for both process costing and job costing systems. However, several work-in-process inventory accounts are typically used in a process costing system to track the flow of product costs through each production department. Question: A process costing systemA system of assigning costs used by companies that produce similar or identical units of product in batches employing a consistent process. is used by companies that produce similar or identical units of product in batches employing a consistent process. It has just completed production for August. At the beginning of August, its Work in Process Inventory account showed direct materials costs of $31,700 and conversion costs of $29,400. The cost of direct materials used in August was $275,373; conversion costs were $175,068. During the month, the company started and completed 15,190 sets. For August, a total of 16,450 equivalent sets for direct materials and 16,210 equivalent sets for conversion costs have been computed. Question: The beginning of this chapter describes process costing and the flow of costs through accounts used in a process costing system. The challenge is determining the unit cost of products being transferred out of each departmental work-in-process inventory account. Data for Work in Process Inventory on August 31 were as follows: shampoo, 4,500 liters; stage of completion, 60 percent for conversion costs and 100 percent for direct materials. From this information, compute the equivalent units of production for direct materials and conversion costs for the month. In Macadoo Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion costs, and production data for its Sterilizing Department in selected months during 2012 are as follows. Beginnig Ending. As products physically move through the production process, the product costs associated with these products move through several important accounts as shown back in Figure 4.1 A Comparison of Cost Flows for Job Costing and Process Costing . The remaining bricks were still in process at the end of the year and were 60 percent complete. The company’s process costing system adds all direct materials costs at the beginning of the production process; conversion costs are incurred uniformly throughout the process.
No