AS Corporation uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in ‘Department A’. Conversion costs were 75% complete with respect to the 4,000 units in work in process at 1st March and 50% complete with respect to the 6,000 units in work in process at 31st March. During March, 12,000 units were completed and transferred to the ‘Department B’. An analysis of the costs relating to work in process at 1st March and to production activity for March follows: Materials Conversion Work in process March 1 Rs. 13,800 Rs. 3,740 Costs added during March........................... Rs. 42,000 Rs. 26,260 The total cost per equivalent unit for March was
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.
AS Corporation uses the weighted-average method in its
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|
|
Materials |
Conversion |
|
|
Work in process March 1 |
Rs. 13,800 |
Rs. 3,740 |
|
|
Costs added during March........................... |
Rs. 42,000 |
Rs. 26,260 |
The total cost per equivalent unit for March was
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