At Earith industries at the beginning of April there were no partially finished goods on hand. During the month, 6000 completed units were produced, together with 800 units partially completed. Details of the partially finished items were: Total Cost Percentage Completed (K) Materials 12 540 75 Labour 8 476 65 Overheads 7 084 55 Calculate: The total equivalent production The cost per complete unit The total value of work – in – progress
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.
At Earith industries at the beginning of April there were no partially finished goods on hand. During the month, 6000 completed units were produced, together with 800 units partially completed. Details of the partially finished items were:
Total Cost Percentage Completed
(K)
Materials 12 540 75
Labour 8 476 65
Calculate:
- The total equivalent production
- The cost per complete unit
- The total value of work – in – progress
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