Draper Corporation computed the physical flow of units for Department D for the month of December as follows: Units completed From work in process on December 1 20,000 From December production 80,000 Total 100,000 Materials are added at the beginning of the process. Units of WIP at December 31 were 16,000. As to conversion costs, WIP at December 1 was 70 percent complete and WIP at December 31 was 50 percent complete. Using the FIFO method, what are the equivalent units of production for materials and conversion costs for the month of December, respectively?
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.
Draper Corporation computed the physical flow of units for Department D for the month of December as follows:
| Units completed | |
| From work in process on December 1 | 20,000 |
| From December production | 80,000 |
| Total | 100,000 |
Materials are added at the beginning of the process. Units of WIP at December 31 were 16,000. As to conversion costs, WIP at December 1 was 70 percent complete and WIP at December 31 was 50 percent complete.
Using the FIFO method, what are the equivalent units of production for materials and conversion costs for the month of December, respectively?
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