Ivan Baggers Co. manufactures Berry Black iPhones that passes through two departments, D1 and D2. Materials are added in the D2 Department when conversion is at 50% completion. Conversion costs are incurred uniformly. The activity in units for the D2 department during June are as follows: WIP, June 1 (60% as to conversion) 10,000 Transferred in from D1 Department 64, 000 Defective units at final inspection 5,000 Transferred to finished goods inventory WIP, June 30 (40% complete as to conversion) 12,000 The normal limits on production losses is set at 5% of the units started during the period. Total cost of work in process as of June 1 are: materials-P60,000; conversion-P95,000. Cost of transferred in units from D1 department totaled P870,000. Total number of normal lost units is
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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