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Accounts are most definitely loved by students all over. But then again the process costing chapter can really get difficult for them. It is absolutely why we at myhomeworkhelp.com offer the best available help to the students.
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Happy Inc makes toys. And it actually manufactures a number of different toys. One of these products is, of course, Happy E2. Single direct cost strategy and Single indirect cost strategy, both are used as the product costing system Happy E2.
Each of these products is tested well. They thus have to go through two departments altogether. These are the assembly as well as the testing departments. The direct materials are put into use at the initial stage only. While the additional direct materials are actually introduced at the end of testing.
Both the processes have their conversion costs applied. Lastly, the Happy E2 gets through.
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Case 2: Process Costing with no beginning but an ending work – in – Process Inventory
The entire 500 units were built in January leaving February with zero units. The customers placed late orders, and thus only 220units were produced.
There were 280 partially assembled units. These were though fully processed.This was with accordance with direct materials. It is only because all these direct materials are added in the initial stages of the assembly process.
The conversion costs slowly added. Accordingly, only 60 % was complete.
Total costs for February:
- Direct materials costs in February $40.000
- Conversion costs February $23.250
- Total Assembly Departments costs $63.250
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Problem: How to calculate the fully assembled units? Also how to calculate the cost of the partially assembled units as well?
Step 1: By summarizing the flow of physical unit of output
Step 2: By computing output in terms of equivalent units
Step 3: By computing equivalent unit costs
Step 4: By summarizing the total costs to account. Also, ensure that these are assigned to the completed units. And also to the process ending units.
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