Dorman Music Corporation manufactures guitars and uses a FIFO process costing system. The following information relates to September production: Percent Complete with Respect to Conversion costs Work in process, September 1 Units started into production Work in process, September 30 Number of units 10,000 45,000 4,000 20% 75% Conversion cost in work in process on September 11 Conversion cost added to production during September Total cost $ 32,000 842,400 $874,400 The amount of conversion cost that should be assigned to the guitars in work in process on September 30 is closest to (Round your intermediate calculations so 2 decimal places)
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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