Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 30,700 units of product to finished goods inventory. Its 4,700 units of beginning work in process consisted of $21,500 of direct materials and $298,440 of conversion costs. It has 3,250 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $521,700 of direct material costs and $3,031,560 of conversion costs were charged to production.
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.
Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 30,700 units of product to finished goods inventory. Its 4,700 units of beginning work in process consisted of $21,500 of direct materials and $298,440 of conversion costs. It has 3,250 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $521,700 of direct material costs and $3,031,560 of conversion costs were charged to production.
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