Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,000 models, and transferred them to the Distribution Department. There were 2,500 models in beginning inventory. All direct materials costs are added at the end of the production cycle and conversion costs are added uniformly throughout the production process. The WA method of process costing is being followed. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs. Beginning inventory: Direct materials costs $19,200 Conversion costs $10,800Manufacturing costs added during the accounting period: Direct materials costs $70,000 Conversion costs $240,000
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.
Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,000 models, and transferred them to the Distribution Department. There were 2,500 models in beginning inventory. All direct materials costs are added at the end of the production cycle and conversion costs are added uniformly throughout the production process. The WA method of
Beginning inventory:
| Direct materials costs | $19,200 |
| Conversion costs | $10,800 |
| Direct materials costs | $70,000 |
| Conversion costs | $240,000 |
What is the cost assigned to ending inventory during October?
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