Option #2: Production Cost Accounting
Maple, Inc., manufactures syrup that goes through three processing stages prior to completion. Information on work in the first department, blending, is given below for August:
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Production Data: |
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Pounds in process, August 1; materials 100% complete; conversion 70% complete |
3,000 |
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Pounds started into production during August |
85,000 |
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Pounds completed and transferred out |
? |
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Pounds in process, August 31; materials 80% complete; conversion 30% complete |
6,000 |
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Cost Data: |
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Work in process inventory, August 1: |
$900 |
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Conversion cost |
$5,900 |
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Cost added during May: |
$151,000 |
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Conversion cost |
$161,700 |
The company uses the weighted-average method. However, since FDA regulations are changing, management is considering converting to a job costing system of accounting so that costs may be traced by batch rather than process. Management is concerned about the advantages and disadvantages of doing so.
Instructions:
- Compute the equivalent units of production.
- Compute the costs per equivalent unit for the month.
- Discuss with management the advantages and disadvantages of implementing a job costing system versus a process costing system.
Provide your answers in a clearly organized PowerPoint presentation of 4-5 slides. Check spelling and formatting for readability. Document your sources. Where applicable, written comments must be in accordance with the CSU-Global Guide to Writing and APA Requirements
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