Posted: June 17th, 2015

Production Cost Accounting

Production Cost Accounting

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:

Production Data:

Pounds in process, August 1; materials 100% complete; conversion 70% complete

3,000

Pounds started into production during August

85,000

Pounds completed and transferred out

?

Pounds in process, August 31; materials 80% complete; conversion 30% complete

6,000

Cost Data:

Work in process inventory, August 1:
Materials cost

$900

Conversion cost

$5,900

Cost added during May:
Materials cost

$151,000

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:
1.Compute the equivalent units of production.
2.Compute the costs per equivalent unit for the month.
3.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. Be sure to review the Module 3 Critical Thinking grading rubric, which may be accessed through the Course Information page.
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