Elmo has the following information for the month of October, its first month of operations Work in Process October 1st $0 Units completed & transferred out in October $120,000 Work in Process October 30th $32,000 100% completed for materials 80% completed for conversion costs Costs added in October shown below Materials $145,900 Direct Labour $ 96,000 Overhead $108,000 (1.) Determine the equivalent units of production for October. (2.) Determine the cost of the ending work-in-process. (3.) Determine the cost of goods completed.
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.
Elmo has the following information for the month of October, its first month of operations
Work in Process October 1st $0
Units completed & transferred out in October $120,000
Work in Process October 30th $32,000
100% completed for materials
80% completed for conversion costs
Costs added in October shown below
Materials $145,900
Direct Labour $ 96,000
(1.) Determine the equivalent units of production for October.
(2.) Determine the cost of the ending work-in-process.
(3.) Determine the cost of goods completed.
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