For Johnny Company, materials are added at the start of the process in Department Yen. Units received from Department Won costs P11.10 while in Department Yen, unit costs for materials and conversion costs were P1 and P1.22 respectively. The company’s quantity data showed that WIP beg, which had a cost of P80,000, had 8,000 units and were ¾ done. During the period, Department Won transferred 50,000 units to Department Yen. At the end of the period, WIP has 10,000 units which are 1/5 done and there were 3,000 normal lost units. Compute for the total cost of units transferred to finished goods assuming that the lost units were spoiled at the start of processing. *
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.
For Johnny Company, materials are added at the start of the process in Department Yen. Units received from Department Won costs P11.10 while in Department Yen, unit costs for materials and conversion costs were P1 and P1.22 respectively. The company’s quantity data showed that WIP beg, which had a cost of P80,000, had 8,000 units and were ¾ done. During the period, Department Won transferred 50,000 units to Department Yen. At the end of the period, WIP has 10,000 units which are 1/5 done and there were 3,000 normal lost units. Compute for the total cost of units transferred to finished goods assuming that the lost units were spoiled at the start of processing. *
Inventory represents the amount of goods purchased by a manufacturing firm to resell to the customers or to further process such goods into final consumable goods.
Inventory for a financial institution represents the bucket of financial securities available for sale to the customers.
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