4,600 Units in BWIP X Fraction to Complete (60%) 840 Units in EWIP X Fraction Complete (4,000 X 60%) 2,400 Equivalent units of output (FIFO) 7,840 April’s costs to account for are as follows: BWIP (40% complete) $1,120 Materials 10,000 Conversion cost
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.
Loren Inc. manufactures products that pass through two or more processes. During April, equivalent units were computed using the FIFO method:
| Units started and completed | 4,600 | |
| Units in BWIP X Fraction to Complete (60%) | 840 | |
| Units in EWIP X Fraction Complete (4,000 X 60%) | 2,400 | |
| Equivalent units of output (FIFO) | 7,840 | |
| April’s costs to account for are as follows: | ||
| BWIP (40% complete) | $1,120 | |
| Materials | 10,000 | |
| Conversion cost | 4,000 | |
| Total | $15,120 |
Required:
1. Calculate the unit cost for April using the FIFO method. Round your answer to the nearest cent.
$fill in the blank 1per unit
2. Using the FIFO method, determine the cost of EWIP and the cost of the goods transferred out. In your calculations round unit cost to the nearest cent and your final answers to the nearest dollar.
| Cost of ending work in process | $fill in the blank 2 |
| Cost of goods transferred out |
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