As Nash Manufacturing produced bookshelves this month, its accountants were in contact with production managers to keep tabs on costs. The WIP Inventory-Assembly account had a beginning balance as follows: DM costs of $41.200 and conversion costs of $31,500. Additional DM costs were added to this assembly department this month totaling $120.990, along with conversion costs of $42.750. Direct materials were pulled from RM Inventory, while conversion costs consisted of accrued DL costs of $26.350 and applied MOH of $16,400. During the month, 3,000 physical units were completed. Nash uses the weighted-average method of process costing and reported the following equivalent units this month. DM Total equivalent units of work done 3,310 Conversion Costs 2.750
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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