Fahim Corporation uses the weighted-average method in its process costing system. Following are the operating data for the first processing department for the month of June appear below: Units Percent Complete with Respect to Material Beginning work in process inventory....... 45,000 60% Started into production during June................. 105,000 Ending work in process inventory..................... 27,000 30% According to the company’s records, the material cost in beginning work in process inventory was Rs. 334,954 at the beginning of June. Additional material costs of Rs. 612,899 were incurred in the department during the month. The cost per equivalent unit (single unit cost) for material costs for the month is closest to:
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.
Fahim Corporation uses the weighted-average method in its
|
|
|
Units |
Percent Complete with Respect to Material |
|
|
Beginning work in process inventory....... |
45,000 |
60% |
|
|
Started into production during June................. |
105,000 |
|
|
|
Ending work in process inventory..................... |
27,000 |
30% |
According to the company’s records, the material cost in beginning work in process inventory was Rs. 334,954 at the beginning of June. Additional material costs of Rs. 612,899 were incurred in the department during the month.
The cost per equivalent unit (single unit cost) for material costs for the month is closest to:
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