Lazada Inc. adds materials at the beginning of the process in department USB. Conversion costs were 70% complete as to the 9,500 work-in-process units on September 1 and 40% incomplete as to the 7,000 work-in-process units on September 30. During September, 12,000 units were completed and transferred to the next department. An analysis of the cost relating to work-in-process on September 1 and to production activity for September is as follows: Work-in-process, September 1 Materials P10,000 Conversion Costs P12,000 Costs incurred during September Materials P45,000 Conversion Costs P60,000 The total cost per equivalent unit for September under FIFO 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.
Lazada Inc. adds materials at the beginning of the process in department USB. Conversion costs were 70% complete as to the 9,500 work-in-process units on September 1 and 40% incomplete as to the 7,000 work-in-process units on September 30. During September, 12,000 units were completed and transferred to the next department. An analysis of the cost relating to work-in-process on September 1 and to production activity for September is as follows:
Work-in-process, September 1
Materials P10,000
Conversion Costs P12,000
Costs incurred during September
Materials P45,000
Conversion Costs P60,000
The total cost per equivalent unit for September under FIFO is:
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