ABC company has a cycle time of 1.5 days, uses a Raw and In Process (RIP) account, and charges all conversion costs to Cost of Goods Sold. At the end of each month, all inventories are counted, their conversion cost components are estimated, and inventory account balances are adjusted. Raw material cost is backflushed from RIP to Finished Goods. The following information is for May: Beginning balance of RIP account, including $600 of conversion cost Beginning balance of finished goods account, including $2,000 of conversion cost 5,500 6,000 Raw materials received on credit 173,000 Ending RIP inventory per physical count, including$850 conversion cost estimate Ending finished goods inventory per physical count, including $1,550conversion cost estimate 6,200 4,900 Prepare all the journal entries that involve the RIP account and/or the finished goods account.
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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