In a particular month, 1,000 units were introduced in Process A. The normal loss is estimated at 5% of input. At the end of the month, 700 units were produced and transferred to Process B , 230 were incomplete units and 70 units were scrapped at the end of the process. The incomplete units had the following degree of completion: materials 75 %, labor 50%, overheads 50%. Additional details of process A are as follows: Cost of 1000 units introduced - Rs 29000 Additional materials consumed - Rs7200 Direct Labour - Rs16700 Allocated overheads Rs8350. The scrapped units were sold at Rs. 10 per unit. Compute: 1. Statement of Equivalent Production 2. Statement of Cost 3. Statement of Evaluation 4. Process A account
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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