Job-costing systems tend to produce more accurate product cost information compared to process-costing systems. On the other hand, they also tend to be more costly systems than processing costing systems.

a) Required:

Comment on the two observations and include in your analysis which companies would use process costing and which companies would use job costing.

Como Corporation manufactures car seats in its Sarnia plant. Each car seat passes through the Assembly Dept. and then the Testing Dept. Direct materials are added at the beginning of the process whereas conversion costs are incurred uniformly during the process. All units are transferred to the Testing Dept. upon completion.

Data for the month ended, December 2019 is given below:

	Physical units	DM	CC
WIP, beginning	5,000	$1,250,000	$402,750
Started in month	20,000
Completed in month	?
WIP, ending	2,500
Costs added in month		$4,500,000	$2,337,500

	% complete	% complete
WIP, beginning	100%	60%
WIP, ending	100%	70%

Required: Assignment must be submitted in Excel

- Prepare an Input Section based on the information given above relating to the Assembly Dept.

- On a separate sheet, prepare a Production Report for the Assembly Department (Weighted Average Method) for the month of December 2019.

- On a separate sheet, prepare journal entries in General Journal format that references from the Production Report or Input Section for December for the Assembly Department

- On the same sheet as part 3, Prepare a T-account for Work-in-Process for the Assembly Department that references amounts from items 1-3 and calculates the ending balance at December.

- Repeat Items 2, 3, and 4 except using the FIFO method.

B) Peruse the website for companies in manufacturing that you feel would use process costing.

Go to the company’s website and review their annul report.

Required:

You are to assume the role of a Manager for Operations and write a summary report to the new CEO explaining the aspects of production.

In your summary report include the following:

Background on the company and what the company produces (if you have selected a large company only discuss one product line)

How is the product produced?

Are the raw materials added evenly or at the beginning of the process? Explain.

How many departments does the company use? Explain

Identify potential areas for process improvements?

What would be the impact of these improvements?

Note: If the annual report does not show this information, make reasonable assumptions for your report.

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Definitions A process costing system is used by companies that produce similar or identical units of ... View the full answer