Following is a partial production cost report for Mitchell Manufacturing's Canning department Equivalent units of production (EUP) Completed and transferred out Ending Work in Process Cost per EUP Cost of beginning work in process Costs added this period Total costs + Equivalent units of production Cost per EUP Units 80,000 12,000 Direct Materials Percent Complete 100% 100% Direct Materials $ 43,000 144,000 $ 187,000 92,000 $ 2.03 per EUP The total conversion costs transferred out of the Canning department equals: EUP 80,000 12,000 92,000 Conversion $ 63,200 193,600 $ 256,800 88,400 Conversion Percent Complete 100% 80% $ 2.90 per EUP EUP 80,000 8,400 88,400
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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