In a single-process production system, Phunky Phingers produces wool gloves. For November, the company’s accounting records reflected the following: Beginning WIP Inventory (100% complete as to material; 30% as to direct labor; 60% complete as to overhead 14,400 units Units started during the month 108,000 units Ending WIP Inventory (!00% complete as to material; 40% complete as to direct labor; 80% complete as to overhead 24,000 units Cost Component November 1 During November Direct material $15,624 $108,000 Direct labor $2,290 $54,950 Overhead $5,563 $84,989 a. For November, prepare a cost of production report, assuming that the company uses the weighted average method. Note: Round the costs per EUP to the nearest two decimal points; use the rounded amounts in subsequent calculations. Note: Other than costs per EUP, round all amounts to the nearest whole dollar.
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 single-process production system, Phunky Phingers produces wool gloves. For November, the company’s accounting records reflected the following:
| Beginning WIP Inventory (100% complete as to material; 30% as to direct labor; 60% complete as to |
14,400 | units |
| Units started during the month | 108,000 | units |
| Ending WIP Inventory (!00% complete as to material; 40% complete as to direct labor; 80% complete as to overhead | 24,000 | units |
| Cost Component | November 1 | During November |
| Direct material | $15,624 | $108,000 |
| Direct labor | $2,290 | $54,950 |
| Overhead | $5,563 | $84,989 |
a. For November, prepare a cost of production report, assuming that the company uses the weighted average method.
Note: Round the costs per EUP to the nearest two decimal points; use the rounded amounts in subsequent calculations.
Note: Other than costs per EUP, round all amounts to the nearest whole dollar.
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