During period 4, the following production and cost data were summarized. Direct material 1,600 units valued at $51,150 Direct labour cost 39,520 Manufacturing overhead $30,000 Production was 1,400 units fully completed and 200 incomplete units which had reached the following degree of completion: Material 75% Labour 60% Manufacturing Overheads 50% 1. Calculate the total equivalent production, the cost per completed unit and the value of WIP. 2. Prepare the journal entries necessary to record the assignment of direct materials and direct labour and the allocation of manufacturing overhead to the process. Also, give the journal entries for the transfer of units completed to Finished Goods Inventory.
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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