FIFO Method Taxes R Us (TRU), an income tax preparation firm, uses the FIFO method of process costing for its monthly reports. TRU has no materials cost in the preparation of the returns. Thefollowing shows its March information:[LO 6-2, 6-3, 6-5]Returns in process, March 1 (30% complete) 100Returns started in March 1,600Returns in process, March 31 (90% complete) 200Labor and overhead costs for returns in process, March 1 $2,500Labor and overhead costs incurred in March $173,250Required Calculate the following amounts for conversion costs using the FIFO method:1. Number of equivalent units (tax returns).2. Cost per equivalent unit.3. Cost of completed tax returns for the month of March.4. Cost of tax returns in process as of March 31
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.
FIFO Method Taxes R Us (TRU), an income tax preparation firm, uses the FIFO method of
following shows its March information:
[LO 6-2, 6-3, 6-5]
Returns in process, March 1 (30% complete) 100
Returns started in March 1,600
Returns in process, March 31 (90% complete) 200
Labor and overhead costs for returns in process, March 1 $2,500
Labor and overhead costs incurred in March $173,250
Required Calculate the following amounts for conversion costs using the FIFO method:
1. Number of equivalent units (tax returns).
2. Cost per equivalent unit.
3. Cost of completed tax returns for the month of March.
4. Cost of tax returns in process as of March 31
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
