AB Sdn. Bhd. (ABSB) is a manufacturer of superior basin, uses the First-In First-Out (FIFO) method in its process costing system. ABSB has produced the basin that passes through two processing departments: Moulding Department and Packaging Department. In the Moulding Department, all materials were added at the beginning of the process. Direct labor and manufacturing overhead were added uniformly. Percentage of completion in the Moulding Department for conversion costs is 40 percent for beginning work in process and 70 percent for ending work in process. Units and costs information related to the Moulding Department during October 2016 was summarized as follows: Units Costs Beginning work in process 1,800 Units started into production 48,750 Units started and completed 45,900 Units completed and transferred ? Ending work in process ? Beginning work in process: Direct materials costs (RM) 94,575 Conversion costs (RM) 62,946 Total costs of beginning work in process (RM) 157,521 Current period costs: Direct materials costs (RM) 234,000 Conversion costs (RM) 225,285 Total current period costs (RM) 459,285 You are required to : (a) Prepare the production report using FIFO method (b) Prepare the production report using weighted-average method
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.
AB Sdn. Bhd. (ABSB) is a manufacturer of superior basin, uses the First-In First-Out (FIFO) method in its
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|
Units |
Costs |
|
Beginning work in process |
1,800 |
|
|
Units started into production |
48,750 |
|
|
Units started and completed |
45,900 |
|
|
Units completed and transferred |
? |
|
|
Ending work in process |
? |
|
|
|
|
|
|
Beginning work in process: |
|
|
|
Direct materials costs (RM) |
|
94,575 |
|
Conversion costs (RM) |
|
62,946 |
|
Total costs of beginning work in process (RM) |
|
157,521 |
|
|
|
|
|
Current period costs: |
|
|
|
Direct materials costs (RM) |
|
234,000 |
|
Conversion costs (RM) |
|
225,285 |
|
Total current period costs (RM) |
|
459,285 |
You are required to :
(a) Prepare the production report using FIFO method
(b) Prepare the production report using weighted-average method
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