Information on equivalent production quantities and unit equivalent product costs of the production phase in a production company that applies the phase cost system are as follows: Production Completed and Transferred Equivalent Production Quantity: 30,000 Units Period End Stocks of Semi-finished Products Equivalent Production Quantity: Direct Primary Material and Material: 9.000 Units Equivalent Production Quantity: Direct Labor: 8,000 Units Equivalent Production Amount: General Production Expenses: 8.000 Units Unit equivalent product costs are 0.7 TL for direct raw materials and materials, 0.3 TL for direct labor and 0.5 TL for general production expenses. Based on this information, what is the total equivalent unit cost? a) 1.5 TL B) 0.7 TL NS) 0.3 TL D) 1.0 TL TO) 0.5 TL
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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Information on equivalent production quantities and unit equivalent product costs of the production phase in a production company that applies the phase cost system are as follows:
Production Completed and Transferred
Equivalent Production Quantity: 30,000 Units
Period End Stocks of Semi-finished Products
Equivalent Production Quantity: Direct Primary Material and Material: 9.000 Units
Equivalent Production Quantity: Direct Labor: 8,000 Units
Equivalent Production Amount: General Production Expenses: 8.000 Units
Unit equivalent product costs are 0.7 TL for direct raw materials and materials, 0.3 TL for direct labor and 0.5 TL for general production expenses.
Based on this information, what is the total equivalent unit cost?
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Equivalent units cost is already given for Material , Labour and Overhead. Total Equivalent unit cost will be calculated as follows
Equivalent unit cost = Direct Materiel+ Direct Labour + Overhead
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