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PE 20-1A Job Order Vs. Process Costing

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    PE 20 - 1A Job order vs. process costing Which of the following industries would typically use job order costing, and which would typically use process costing? Flour mill Plastic manufacturing Gasoline refining Print shop Movie studio Home construction Answer: Process costing: Flour mill, Plastic manufacturing, Gasoline refining. Job order costing: Movie studio, Print shop, Home construction. PE 20 - 2A Units to be assigned cost Rose Petal Lotion Company consists of two departments, Blending and Filling. The Filling Department received 46,000 ounces from the Blending Department. During the period, the Filling Department completed 46,500 ounces, including 2,300 ounces of work in process at the beginning of the period. The ending work in process inventory was 1,800 ounces. H ow many ounces were started and completed during the period? Answer: Ounces started and completed during the period = 46,500 - 2,300 = 44,200 ounces OR 46,000 – 1800 = 44,200 ounces PE 20 - 3A Equivalent units of materials cost The Filling Department of Rose Petal Lotion Company had 2,300 ounces in beginning work in process inventory (70% complete). During the period, 46,500 ounces were completed. The ending work in process inventory was 1,800 ounces (25% complete). What are the total equivalent units fir direct materials if materials are added at the beginning of the process? Answer: Total equivale nt unit for direct material is 46,000 , computed as follows : Total whole units Percent materials added in period Equivalent unit for direct materials Inventory in process, beginning of period 2,300 0% 0 Started and completed during the period 44,200 100% 44,200 Transferred out of filling (Completed) 46,500 - 44,200 Inventory in process, end of period 1,800 100% 1,800 Total units to be assigned cost 48,300 46,000 Started and completed during the period = 46,500 – 2,300 = 44,200 PE 20 - 4A Equivalent units of conversion costs The Filling Department of Rose Petal Lotion Company had 2,300 ounces in beginning work in process inventory (70% complete). During the period, 46,500 ounces were completed. The ending work in process inventory was 1,800 ounces (25% complete). What are the equivalent units for conversion costs? Answer: Total whole unit Percent conversion completed in period Equivalent units for conversion Inventory in process, beginning of period 2,300 30% 690 Started and completed during the period 44,200 100% 44,200 Transferred out of filling (completed) 46,500 - 44,890 Inventory in process, end of period 1,800 25% 450 Total units to be assigned cost 48,300 45,340 PE 20 - 5A Cost per equivalent unit The cost of direct materials transferred into the Filling Department of Rose Petal Lotion Company is $18,400. The conversion cost for the period in the Filling Department is $4,534. The total equivalent units for direct materials and conversion are 46,000 ounces and 45,340 ounces respectively. Determine the direct materials and conversion costs per equivalent unit.

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