Equivalent Units of Production: Average Cost Method Units of production data for the two departments of Continental Cable and Wire Company for May of the current fiscal year are as follows: Drawing Department Winding Department 2,000 units, 70% completed 650 units, 30% completed Work in process, May 1 Completed and transferred to next processing department during May Work in process, May 31 Whole units 32,000 units 1,500 units, 65% completed Whole units Each department uses the average cost method. a. Determine the number of whole units to be accounted for and to be assigned costs and the equivalent units of production for the Drawing Department. X units 31,200 units units 1,000 units, 35% completed Equivalent units of production b. Determine the number of whole units to be accounted for and to be assigned costs and the equivalent units of production for the Winding Department. units
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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