Company manufactures Product ABC in a two-stage production cycle in Department 1 and 2. Materials are added at the end of the process in Department 2. Conversion Costs for Department 2 were 50% complete as to the 6,000 units in Beginning WIP and 75% complete as to the 8,000 units in ending WIP, 12,000 Units were completed and transferred out of department 2 during October. An analysis of the cost relating to WIP and production activity in Department 2 for October Follows: Transferred in Cost Materials Cost Conversion Cost Beg. Wip Cost P12,000 P2,500 P1,000 Cost added P29,000 P5,000 5,000 Compute the total cost per unit transeferred-out for October of Product ABC using Duday 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.
Company manufactures Product ABC in a two-stage production cycle in Department 1 and 2. Materials are added at the end of the process in Department 2. Conversion Costs for Department 2 were 50% complete as to the 6,000 units in Beginning WIP and 75% complete as to the 8,000 units in ending WIP, 12,000 Units were completed and transferred out of department 2 during October. An analysis of the cost relating to WIP and production activity in Department 2 for October Follows:
|
|
Transferred in Cost |
Materials Cost |
Conversion Cost |
|
Beg. Wip Cost |
P12,000 |
P2,500 |
P1,000 |
|
Cost added |
P29,000 |
P5,000 |
5,000 |
Compute the total cost per unit transeferred-out for October of Product ABC using Duday FIFO.
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