A Ltd had at the beginning of 2019 a work in progress of 5,000 units. During 2019, 65,000 additional units were started into production. Ending work in progress on 31st December, 2019, was 12,000 units. The beginning work in progress was 100% complete as to direct materials and 50% complete as to conversion costs. The ending work in progress was 100% complete as to direct materials and 80% complete as to conversion costs. Total direct materials put into work in progress cost £77,500. Total conversion costs put into process costs were £105,375. Beginning work in progress cost £33,500, of which £20,250 was for materials and £13,250 for conversion. All materials are added at the start of the production process, and conversion costs are incurred uniformly throughout manufacturing. A Ltd uses a weighted-average process cost system. What is the total cost assigned to A Ltd’s ending work in progress inventory at the end of 2019? 1. £33,100 2. £33,619 3. £37,357 4. £31,875
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.
A Ltd had at the beginning of 2019 a work in progress of 5,000 units. During 2019, 65,000 additional units were started into production. Ending work in progress on 31st December, 2019, was 12,000 units. The beginning work in progress was 100% complete as to direct materials and 50% complete as to conversion costs. The ending work in progress was 100% complete as to direct materials and 80% complete as to conversion costs. Total direct materials put into work in progress cost £77,500. Total conversion costs put into process costs were £105,375. Beginning work in progress cost £33,500, of which £20,250 was for materials and £13,250 for conversion. All materials are added at the start of the production process, and conversion costs are incurred uniformly throughout manufacturing. A Ltd uses a weighted-average
1. £33,100
2. £33,619
3. £37,357
4. £31,875
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