Appendix EX 20-27 Equivalent units of production and related costs The charges to Work in Process-Baking Department for a period as well as informa- tion concerning production are as follows. The Baking Department uses the average cost method, and all direct materials are placed in process during production. Work in Process-Baking Department Bal., 900 units, 40% completed 2,466 To Finished Goods, 8,100 units ? Direct materials, 8,400 units 34,500 Direct labor 16,200 Factory overhead Bal., 1,200 units, 60% completed 8,574
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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