1. Compare and contrast job-order and process costing systems.
2. What is a “job” as defined in a job-order costing system?
3. Can standard costing be used in job-order costing? If so, what conditions must exist? If not, explain why.
4. List and explain the six steps of cost assignment when using process costing. How does cost assignment differ between the weighted average and FIFO methods?
5. When is a hybrid costing system appropriate in a manufacturing setting?
6. Consider the following date for a cooking department for the month of February:
Physical Units Work in process, beginning inventory* 11,000 Started during current period 74,000 To account for 85,000 Good units completed and transferred out during period: From beginning work in process 11,000 Started and completed 50,000 Good units completed 61,000 Spoiled units 8,000 Work in process, ending inventory~ 16,000 Accounted for 85,000
*Direct material, 100% complete; conversion costs, 25% complete ~Direct material, 100% complete; conversion costs, 75% complete
Inspection occurs when production is 100 percent completed. Normal spoilage is 11 percent of good units completed and transferred out during the current period.
The following cost data are available:
Work in process, beginning inventory: Direct material $220,000 Conversion costs 30,000 $250,000 Costs added during current period: Direct material 1,480,000 Conversion costs 942,000 Costs to account for $2672,000
Required:
Prepare a detailed cost of production report. Use the FIFO method. Distinguish between normal and abnormal spoilage