Question
LAB. COST ACCOUNTING ACCOUNTING FOR LOSS IN THE PRODUCTION PROCESS ( ASSUMPTION OF WEIGHTED AVERAGE COST FLOW ) PT. STARBOX produces packaged Arabica-Toraja ground coffee.
LAB. COST ACCOUNTING ACCOUNTING FOR LOSS IN THE PRODUCTION PROCESS ( ASSUMPTION OF WEIGHTED AVERAGE COST FLOW )
PT. STARBOX produces packaged Arabica-Toraja ground coffee. The refining and packing process only occurs in one integrated department. Because STARBOX only produces one identical product, the costing system is based on a process-costing mechanism. The company uses a weighted average cost flow assumption to account for work-in-process inventory. Data related to November 2009 operations in the Grinding & Packing Department are:
Number of units in BDP, beginning inventory 800 Number of units started processing 4,200 The number of units transferred to persed brg becomes 3,800 Number of units in BDP, ending inventory (100% Raw Material and 20% Conversion Fee) 720 Number of defective units during the current period (100% Raw Material and 80% Conversion Fee) 480
(in rupiah) BDP, beginning inventory Raw Material 1,230,000 Direct Labor 732,800 Factory Overhead 1,099,200
Cost added to process over the current period Raw Material 7,770,000 Direct Labor 4,547,200 Factory Overhead 6,820,800
Instructions: 1. If the defective unit occurs due to the company's internal failure, prepare a production cost report for PT. STARBOX with notes: The defective item has a selling price of Rp. 2,500 per unit. The remaining cost of defective goods (after deducting the selling price) is charged to overhead
2. Recompile the production cost report for PT. STARBOX if the defective unit is assumed to be a normal shrinkage in production!
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