Edwards manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection occurs when units are 60% converted. Normal spoilage, if any, generally constitute 4% of the good units - units that successfully passed the inspection in current month. Company use FIFO method. Data for May 2021 are as follows: WIP, beginning inventory 5/1/2021 24,200 units Direct materials (100% complete) Conversion costs (75% complete) Started during December 83,600 units Completed and transferred out 5/31/2021 79,200 units WIP, ending inventory 5/31/2021 19,800 units Direct materials (100% complete) Conversion costs (65% complete) Costs for December: WIP, beginning Inventory: Direct materials $ 165,000 Conversion costs 84,480 Direct materials added 244,640 Conversion costs added 319,000 What amount of conversion costs is assigned to the ending Work-in-Process account for May?
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.
Edwards manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection occurs when units are 60% converted. Normal spoilage, if any, generally constitute 4% of the good units - units that successfully passed the inspection in current month. Company use FIFO
method.
Data for May 2021 are as follows:
WIP, beginning inventory 5/1/2021 24,200 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 83,600 units
Completed and transferred out 5/31/2021 79,200 units
WIP, ending inventory 5/31/2021 19,800 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 165,000
Conversion costs 84,480
Direct materials added 244,640
Conversion costs added 319,000
What amount of conversion costs is assigned to the ending Work-in-Process account for May?
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