2. In the Shaping Dept at the beginning of the month, we had 800 decorative bowls that were 3/5 complete. We started 14,200 more bowls during the month. At the end of the month, we had 1,000 bowls that were 4/5 complete. Assume DM are added at the beginning of the process and CC are added evenly throughout the process. At the beginning of the month, the materials cost was $1,800 and the conversion cost was $312. During the month, we added $33,370 of materials and $10,024 of conversion costs. Prepare the 5-step Production Cost Report using: FIFO a. b. Weighted Average For each method, at the end of the month what is the cost transferred out to the next department and what is the cost remaining in WIP - Shaping Dept?
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.
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