drug in a single processing department. Direct materials are added at the start of the process. Conversion costs are added evenly during the process. Bio Doc uses the FIFO method of process costing. The following information for July 2008 is available. Equivalent Units Physical Units Conversion Costs Direct Materials 8,500 Work in process, July 1 Started during July Completed and transferred out during July Work in process, July 31 "Degree of completion: direct materials, 100%; conversion costs, 20%. "Degree of completion: direct materials, 100%; conversion costs, 60%. 8,500 35,000 33,000 10,500 1,700 33,000 33,000 10,500 6,300 Total Costs for July 2008 Work in process, beginning Direct materials $63,100 Conversion costs 45,510 $108,610 Direct materials added during July Conversion costs added during July 284,900 485,040 $878,550 Total costs to account for Required: (a) Calculate cost per equivalent unit for direct materials and conversion costs. (b) Summarize total costs to account for, and assign total costs to units completed (and transferred out) and to units in ending work in process.
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.
Bio Doc Corporation is a biotech company based in Milpitas. It makes a cancer-treatment
drug in a single processing department. Direct materials are added at the start of the process.
Conversion costs are added evenly during the process. Bio Doc uses the FIFO method of
costing
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