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Chapter 18: Q3RQ (page 1006)

Question: What are the primary differences between job order costing systems and process costing systems?

Short Answer

Expert verified

Answer:

The primary difference between the job order costing system and the process costing is:

In job costing, cost is calculated for each job and in process costing, the cost is calculated for the complete production at different process stage.

Step by step solution

01

Job costing system

The job costing system is used when the company calculate the cost of each job on different jobs basis.

02

Process costing system

The process costing system is used by the companies when the similar product is manufactured through various processing system. It helps in calculating the cost at each processing stage.

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Most popular questions from this chapter

Casey Carpet manufactures broadloom carpet in seven processes: spinning, dyeing, plying, spooling, tufting, latexing, and shearing. In the Dyeing Department, direct materials (dye) are added at the beginning of the process. Conversion costs are incurred evenly throughout the process. Information for July 2018 follows:

UNITS

Beginning work-in-process inventory

75 rolls

Transferred in from spinning department during July

590 rolls

Completed during July

550 rolls

Ending work in process inventory (80% complete for conversion work)

115 rolls

COSTS

Beginning work in process inventory (transferred in costs, \(3,700, material costs, \)1,450 conversion costs, \(4,950)

\)10,100

Transferred in from the spinning department

21,570

Material costs added during July

11,185

Conversion costs added during July (Manufacturing wages, \(8,050; manufacturing overhead allocated, \)45,422)

53,472

Requirements

1. Prepare a production cost report for Casey鈥檚 Dyeing Department for July. The

company uses the weighted-average method.

2. Journalize all transactions affecting Casey鈥檚 Dyeing Department during July, including the entries that have already been posted. Assume labor costs are accrued and not yet paid.

Describe the three groups of units that must be accounted for when using the FIFO method.

The Packaging Department started the month with 600 units in process, received 1,200 units from the Finishing Department, and transferred 1,500 units to Finished Goods. Direct materials are added at the beginning of the process and conversion costs are incurred evenly. The units still in process at the end of the month are 60% complete for conversion costs. Calculate the number of units still in process at the end of the month and the equivalent units of production. The company uses the weighted-average method.

Question: The Finishing Department of Lee and Lewis, Inc., the last department in the manufacturing process, incurred production costs of \(220,000 during the month of June.If the June 1 balance in Work-in-Process Inventory鈥擣inishing is \)0 and the June 30balance is $70,000, what amount was transferred to Finished Goods Inventory?

Brian鈥檚 Frozen Pizzas uses FIFO process costing. Selected production and cost data follow for April 2018.

Prepping department

Units to account for:

Beginning work-in-process, March 31

20,000

Started in April

45,000

Total units to account for

65,000

Units accounted for:

Completed and transferred out during April:

From beginning work-in-process inventory

20,000

Started and completed during April

30,000

Ending work-in-process, April 30

15,000

Total units accounted for

65,000

Requirements

1. Calculate the following:

a. On March 31, the Prepping Department beginning Work-in-Process Inventory was 75% complete for materials and 55% complete for conversion costs. This means that for the beginning inventory % of the materials and % of the conversion costs were added during April.

b. On April 30, the Prepping Department ending Work-in-Process Inventory was 60% complete for materials and 85% complete for conversion costs. This means that for the ending inventory % of the materials and % of the conversion costs were added during April.

2. Use the information in the table and the information in Requirement 1 to compute the equivalent units of production for direct materials and conversion costs for the Prepping Department.
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