Hanrahan Company uses process costing to account for the costs of its only product, X. On December 31, the inventory for Product X was as follows: Work in Process, Beginning Started and In Process Transferred out Work in process-Ending 800 units (3/4 complete as to conversion costs) 1,200 units 1,500 units 500 units (3/4 complete as to conversion costs) Materials are added at the beginning of the process. Beginning Cost: Materials Conversion Costs Current Cost: Materials Conversion Costs Required: P80,000 P30,000 P150,000 P75,000 1. Compute the equivalent units of materials and conversion costs using the FIFO Method. 2. Compute the equivalent units of materials and conversion costs using the Average Method. 3. Determine the total cost of ending work in process under FIFO Method. (Note: Always use two decimal places, if any).
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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