Lucas Corporation uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in the Forming Department, which is the first of two stages in its production process. Information concerning operations in the Forming Department in October follows: Units Materials Cost Work in process on October 1 6,000 $ 3,000 Units started during October 50,000 $ 25,560 Units completed and transferred to the next Department during October 44,000 What was the materials cost of work in process at October 31? $5,520 $6,120 $3,060 $6,000
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.
| Units | Materials Cost |
||||||
| Work in process on October 1 | 6,000 | $ | 3,000 | ||||
| Units started during October | 50,000 | $ | 25,560 | ||||
| Units completed and transferred to the next Department during October | 44,000 | ||||||
|
$5,520
|
||
|
$6,120
|
||
|
$3,060
|
||
|
$6,000
|
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