9. CIP Industries produces plastic ice cube trays in two processes: Heating and stamping. All materials are added at the beginning of the Heating Department process. On November 1, the Heating Department had in process 1,000 trays that were 70% complete. During November 1, it started into production 12,000 trays. On November 30, 2020, 2,000 trays that were 60% complete were in process. The following cost information for the Heating Department was also available: Work in process, Nov 1 Costs incurred in November Materials OMR 6,400 Material OMR 30,000 Conversion costs OMR 3,600 Labour OMR 23,000 Cost of work in process, Nov OMR 10,000 Overhead OMR 40,500 1 Instructions: Prepare a production cost report for the Heating Departments for the month of November 2020.
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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