Accounting Process Costing Homework Help
- July 12, 2017
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- Category: Accounting QA
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As management accountant for the Confectionery Division of Jupiter Australia you are required to produce end of period product costing for a range of different product lines including the ‘Nutty Nut’ chocolate range. The Jupiter Australia factory responsible for manufacturing these products operates continuously 24 hours a day, 7 days a week and utilises a process costing system and manufactures for the Australian domestic market and the Australasian export market.
The process for manufacturing Nutty Nut is to first make the chocolate, which is then formed into the correct size for each Nutty Nut candy, and which are then coated in a colourful sugar casing. All Raw Material ingredients for the chocolate and sugar coating are added at the commencement of the process including cocoa, milk products, and chocolate liqueurs. For the purpose of accounting the conversion costs of manufacturing are assumed to occur evenly across the whole of the production cycle which takes several hours.
The following information relates to the production of ‘Nutty Nut’ confectionary during the month of January 2014. The Stock Keeping Unit (SKU) adopted for inventory purposes is a batch pack of 1000 individual chocolates.
Work-in-Process: Jan 1, 2014 | 87,214 SKUs | |
Stage of completion | Value | |
Raw materials | 100% | $526,800 |
Conversion | 30% | $202,100 |
Work-in-Process: Jan 31, 2014 | 127,800 SKUs | |
75% Complete |
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A total of 3,926,100 SKUs were commenced during January and the following costs were incurred.
Costs incurred during January 2014: | |
Raw materials | $24,546,500 |
Conversion | $28,236,400 |
Required
(i)Using the Weighted Average Cost Method determine the cost value of closing WIP and the cost value of goods transferred out during the period.
(ii)Using the First In First Out (FIFO) method determine the cost value of closing WIP and the cost value of goods transferred out during the period.
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