Describe how process costing is different than job costing. Identify at least three differences. Describe the two basic differences between the weighted average and the FIFO method. What is the purpose of a production cost report?
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.
to create a model for a production cost report using the weighted average method for the month of May. Following good Excel design techniques, you should have an input area in which you put the department information for the month, and an output area that calculates the production cost report. As always, you should have only formulas or references in your output area. You should also include directions (in a text box) for users.
After completion of the production cost report using the weighted average method, create a new worksheet and label the tab “FIFO”. Create a production cost report using the same information using the FIFO method.
Spartans Bakery has two department: mixing and baking. All products start in the Mixing Department, where materials are added and conversion costs (labor, overhead) are incurred. Once the product is “finished” with regards to the Mixing, it moves to the Baking Department where additional conversion costs are incurred before moving to Finished Goods Inventory.
Raw Materials Inventory ---> WiP – Mixing ---> WiP – Baking ---> Finished Goods Inventory ---> COGS
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