Question

Explain the operation of process costing, including the way the unit costs of finished goods are...

Explain the operation of process costing, including the way the unit costs of finished goods are determined

a. Debt Credit
Work in progress Department Y 262000
Work in progress Department x 262000
b.
WIP Department Y 322000
Raw material 210,000
Direct Labor 45,000
Manufacturing Overhead 67,000
c.
Finished Goods inventory 669,000
WIP Inventory Dep 669,000
Business   Accounting   
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Answer #1
Process costing;
Prcess costing is a costig procedure to assigne cost to the unit of production for producing large quantities of homogeneous products.
And it is a type of operating costing which helps to determine cost of unit at ech stage of production.
a The given journal entry shows that the total manufacturing cost of Department X , $ 262,000 is transferred to Department Y.
b Secondly, Raw material cost of $ 210,000 , Labor cost of $ 45,000 and Manufacturing overhead cost of $ 67,000 in Department Y is charged to production .
c Now the totat manufacturing cost of the product at the finishing stage is $ 669,000.
After completion of the product , it is transferred to finished goods inventory.
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