7. Nizwa Marble Company has several processing departments. Costs charged to the Assembly Department for October 2020 totaled $235,200 as follows: Work in process, October 1 Materials 20,000 Conversion costs 18,560 38,560 Materials added 100,000 Labor 36,640 Overhead 60,000 Production records show that 1,000 units were in beginning work in process 40% complete as to conversion cost, 2,000 units were started into production, and 1,200 units were in ending work in process 10% complete as to conversion costs. Materials are entered at the beginning of each process. Instructions: (a) Compute the physical units (b) Determine the equivalent units of production (c) The unit production costs for the Assembly Department. (d) Determine the assignment of costs to goods transferred out and in process.
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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