Daring watercraft manufactures small boats. Materials are added at the beginning of the process and conversion costs are incurred evenly throughout the process. Data for April follows: Production data Units Percent complete Units in process, April 1 1000 60% Units started into production 4000 Units in process, April 30 1500 20% Cost Data Work in process, April 1 Materials $25 500 Labour $3 000 Manufacturing overhead $6 000 Cost Added: Materials $90 000 Labour $12 000 Manufacturing overhead $18 000 Using the weighted average method, prepare a production cost report for the company.
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.
Daring watercraft manufactures small boats. Materials are added at the beginning of the process and conversion costs are incurred evenly throughout the process. Data for April follows:
Production data Units Percent complete
Units in process, April 1 1000 60%
Units started into production 4000
Units in process, April 30 1500 20%
Cost Data
Work in process, April 1
Materials $25 500
Labour $3 000
Manufacturing
Cost Added:
Materials $90 000
Labour $12 000
Manufacturing overhead $18 000
Using the weighted average method, prepare a production cost report for the company.
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