Exercise 2) At the start of October, ILA Corporation had work in process inventory consisting of 2,000 units that were 90 percent complete with respect to materials and 50 percent complete with respect to conversion costs. The cost of the units was $13,500 ($9,000 of material cost and $4,500 of labor and overhead). During October, the company started 40,000 units and incurred $202,090 of material cost and $165,940 of labor and overhead. The company completed 41,900 units during the month and 100 units were in process at the end of October. The units in ending work in process were 70 percent complete with respect to materials and 45 percent complete with respect to conversion costs. Required: Prepare a production cost report (using the production cost template) for the month of October.
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.
Please do not give solution in image format thanku
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
