and $85,000 on conversion costs this year, completing 47600 socks. Once the socks are completed, they are transferred to
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.
Sally's Sock Puppets Inc. produces thousands of socks each year. The company has one department - sewing.
At the beginning of the period, the sewing department had 8,000 socks in process worth $21,000: $9,600 in direct materials and $11,400 in conversion costs. Socks in inventory at the beginning of the period are 50% complete with respect to direct materials and 65% complete with respect to conversion costs.
The sewing department spent $64,000 on direct materials and $85,000 on conversion costs this year, completing 47600 socks. Once the socks are completed, they are transferred to the finished goods inventory to be shipped.
At the end of the period, the sewing department has 8,000 socks in inventory, 60% complete with respect to direct materials and 85% complete with respect to conversion costs.
Required:
- a) Using FIFO, find the total costs, equivalent units, cost per equivalent unit, and the value of ending WIP and the cost of completed units.
Step by step
Solved in 2 steps with 4 images
