Journal entry to record the transfer of units from

This preview shows page 2 - 3 out of 5 pages.

Journal entry to record the transfer of units from one department to the next is: debit WIP Dept. 2 Credit WIP Dept 1 Cost object in a job order system is the specific and the cost object in a process costing system is the process. Characteristics of process operations: low product flexibility, homogeneous products and services, high volume production Process design = Reorganize production processes to improve efficiency Just-in-time production = RMI and FGI accounts not needed Automation = combines labor with OH, focus on conversion costs per equivalent units Continuous Processing = Continuous movement of materials through the manufacturing processes Services = Non-manufacturing businesses Customer Orientation = Focus on customer Overapplied or underapplied balance in FOH is closed to COGS A department begins the month with 100 units at a cost of $7500 in goods in process. An additional 1000 units are started during the month and additional costs incurred are $12500. At the end of the month, there are 200 units still in process which are 50% complete. The amount transferred to Finished Goods Inventory is $2000. (7500+12500=20000; EUP = 900 x 100% + 200x50%=1000 units; cost per unit = 20000/1000 = 20/unit; GIP = 200x50%x$20-=2000)

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture