Atoz company's product is manufactured in two departments. Units are inspected at the end of the production process in the first department. Data related to the month of may are: WIP beginning( 60% materials, 35% labor, and 25% factory overhead) 1,000 units; started in process this period, 9,000 units; Work in process end (100% materials, 75% labor and 50% Factory overhead) 1,500 unitsm Cost data follows: work in process beginning materials 1,260 labor 770 factory overhead 1,400; cost this month materials 36,240 labor 10,780 and factory overhead 21,725. Compute for the equivalent units of production using FIFO
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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