2. The Finishing Department started the month with 500 units in process, received 2,000 units from the Assembly Department, and transferred 2,100 units to the finished goods storage area. All direct materials are added at the beginning of the process. The units in process at the end of the month are 45% complete with respect to conversion costs. The department uses the weighted-average method. The Finishing Department incurred the following costs: Beginning WIP Added this month Total $ 6,250 $ 31,250 500 2,500 1,250 6,840 $ 8,000 $ 40,590 Transferred In Direct Materials Conversion Costs Total $ 25,000 2,000 5,590 $ 32,590 1). How many units are still in process at the end of the month? 2). Compute the equivalent units of production for the Finishing Department. 3). Determine the cost per equivalent unit for transferred in, direct materials, and conversion costs.
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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