In Ramirez Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion costs, and production data for its Sterilizing Department in selected months during 2020 are as follows. Beginning Work in Process Month Beginning Work in Process Units Transferred Out Units % Complete as to Conversion Cost September 0 2,000 7,000 60 December 0 3,000 12,000 30 Compute the equivalent units of production for (1) materials and (2) conversion costs for each month.
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 Ramirez Company, materials are entered at the beginning of each process. Work in
process inventories, with the percentage of work done on conversion costs, and production data
for its Sterilizing Department in selected months during 2020 are as follows.
|
|
|
|
Beginning Work in Process |
|
|
Month |
Beginning Work in Process |
Units Transferred Out |
Units |
% Complete as to Conversion Cost |
|
September |
0 |
2,000 |
7,000 |
60 |
|
December |
0 |
3,000 |
12,000 |
30 |
Compute the equivalent units of production for (1) materials and (2) conversion costs for
each month.
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