ed this month 18,000 Total units completed and transferred out 14,800 Required: 1. Explain two process costing methods to the manager of the assembly department presenting one pro and one con for each method. 2. If the manager of the assembly department chooses FIFO, prepare a cost report using FIFO.
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.
Cost Accounting_ADM3346 CAPSTONE EXERCISE Chapter 18 Toddler Toys produces toy construction vehicles for young children. Plastic pieces are moulded in the plastics department. The pieces are transferred to the assembly department, where direct materials are added after some assembly has been done. For example, plastic pieces of road graders are put together, then the blades and wheel assemblies are added, and finally some details are painted on the sides and back. The direct materials are added in the assembly department when the process is 75% complete. Beginning inventory 80% complete and ending inventory is 25% complete. Following are data for August: Beginning inventory costs for the assembly department: Transferred in $4,000 Direct materials 2,000 Conversion costs 1,600 Total cost $7,600 Costs incurred in the assembly department during current period: Transferred in $36,000 Direct materials 18,000 Conversion costs 16,000 Total cost $70,000 Physical units in the assembly department: Units in beginning inventory 2,000 Units started this month 18,000 Total units completed and transferred out 14,800 Required: 1. Explain two
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