1. Haruto Company uses process costing to account for the costs of its only product, X. Production takes place in two departments—Sanding and Polishing. On December 31, the inventory for Product X was as follows: No unused materials Work in process— Sanding Department 700 units (3/4 complete as to labor) Work in process— Polishing Department 900 units (1/2 complete as to materials and 3/4 complete as to direct labor) Finished Goods 500 units Required: (1) Compute the equivalent units of materials in all inventories combined at December 31. (2) Compute the equivalent units of the Sanding Department's direct labor in all inventories at December 31.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Step by step
Solved in 2 steps
