Dengo Company makes a trail mix in two departments: Roasting and Blending. Direct materials are added at the beginning of each process, and conversion costs are added evenly throughout each process. The company uses the FIFC method of process costing. October data for the Roasting department follow. Beginning work in process inventory Units started and completed Units completed and transferred out Ending work in process inventory Beginning work in process inventory Costs added this period Direct materials Conversion Total costs to account for Units Cost per equivalent unit of production Costs added this period + Equivalent units of production Cost per equivalent unit of production 3,000 19,200 22,200 2,400 $ 248,400 1,082,970 Materials Direct Materials Conversion 0 Percent Complete 100% 100% Percent Complete 40% $ 120,870 2. Compute cost per equivalent unit of production for both direct materials and conversion. 1,331,370 $ 1,452,240 Conversion 80% 0
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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