INFORMATION Waterloo Ltd uses two processes to manufacture desks. The following details are applicable to Process 2 for March 2022: Details in connection with costs: R Incomplete work (opening): 1 440 000 Costs of previous process 1 134 000 Direct materials 198 000 Conversion costs 108 000 Costs incurred during March 2022: 3 096 000 Transferred from previous process 2 034 000 Direct materials 378 000 Conversion costs 684 000 4 536 000 Production details Units Units of incomplete work (opening): (100% complete i.r.o. materials; 40% complete i.r.o. conversion costs) 30 000 Units received from the previous process 120 000 150 000 Units completed and transferred (90 000) Units of incomplete work (closing): (100% complete i.r.o. materials; 70% complete i.r.o. conversion costs) 60 000 Study the information provided below and prepare the Process Cost Report for Process 2 using the weighted average method. The report must include the following: Cost Statement
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.
INFORMATION
Waterloo Ltd uses two processes to manufacture desks. The following details are applicable to Process 2 for
March 2022:
Details in connection with costs:
R
Incomplete work (opening): 1 440 000
Costs of previous process 1 134 000
Direct materials 198 000
Conversion costs 108 000
Costs incurred during March 2022: 3 096 000
Transferred from previous process 2 034 000
Direct materials 378 000
Conversion costs 684 000
4 536 000
Production details
Units
Units of incomplete work (opening):
(100% complete i.r.o. materials; 40% complete i.r.o. conversion costs) 30 000
Units received from the previous process 120 000
150 000
Units completed and transferred (90 000)
Units of incomplete work (closing):
(100% complete i.r.o. materials; 70% complete i.r.o. conversion costs) 60 000
Study the information provided below and prepare the
weighted average method. The report must include the following:
Cost Statement
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