In a given period production and cost data were as follows: Total Costs Materials GHS5,115 Labour 3,952 Overheads 3,000 12,067 Production was 1,400 fully complete units and 200 partly complete. The degree of completion of the 200 units WIP was as follows: Material 75% Complete Labour 60% Complete Overheads 50% Complete Calculate the total equivalent production, the cost per complete unit and the value of WIP.
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.
In a given period production and cost data were as follows:
|
Total Costs |
Materials |
GHS5,115 |
|
|
Labour |
3,952 |
|
|
|
3,000 |
|
|
|
12,067 |
Production was 1,400 fully complete units and 200 partly complete. The degree of completion of the 200 units WIP was as follows:
Material 75% Complete
Labour 60% Complete
Overheads 50% Complete
Calculate the total equivalent production, the cost per complete unit and the value of WIP.
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