Alberto Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection occurs when units are 60% converted. Spoiled units generally constitute 4% of units that pass inspection successfully in current month. Company is using Weighted Average method for its process costing. Data for December are as follows: Beginning Work in process inventory (CC 75% complete) Physical Units 22,000 76.000 72,000 Units started during current month Units completed and transferred out during current month: Ending Work in process inventory (CC 65% complete) 18,000 Compute equivalent units of production for conversion costs. Example of Answer: 4000 (No comma, space, decimal point, or $ sign)
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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