Goodyear Corporation uses a process cost system in manufacturi tires for the bicycle industry. Materials are added at the beginning process and conversion costs are applied evenly throughout the p At the beginning of March, the work-in-process is 40% complete a end of the month, it is 60% complete. Spoilage is detected at the e the process. Other data for the month include: Beginning WIP inventory Units started Units placed in finished goods Ending WIP inventory Normal spoilage of units finished Conversion costs Cost of direct materials Beginning WIP costs Materials Conversion 1,600 units 20,000 units 12,000 units 1,200 units 20% P604,800 600,000 60,000 60,480
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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