Clonex Labs, Inc., uses the FIFO method in its process costing system. The following data are available for one department for October: Percent Completed Units Materials Conversion Work in process, October 1 27,000 63 % 34 % Work in process, October 31 19,000 76 % 43 % The department started 175,000 units into production during the month and transferred 183,000 completed units to the next department. Required: Compute the equivalent units of production for materials and conversion for October
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.
Clonex Labs, Inc., uses the FIFO method in its
| Percent Completed | |||||
| Units | Materials | Conversion | |||
| Work in process, October 1 | 27,000 | 63 | % | 34 | % |
| Work in process, October 31 | 19,000 | 76 | % | 43 | % |
The department started 175,000 units into production during the month and transferred 183,000 completed units to the next department.
Required:
Compute the equivalent units of production for materials and conversion for October.
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