Manufacturing Overhead 156,400 Department 1 handled the following units during June: Units in process, June 1 Units started in Department 1 Units transferred to Department 2 Units in process, June 30 737,370 2,000 45,000 46,000 1,000 On average, the June 1 units were 40% complete. The June 30 units were 70% complete. Materials are added at the beginning of the process and conversion costs occur evenly throughout the process in Department 1. Gomez uses the FIFO METHOD for process costing. Required: Prepare the product cost report for Department 1 for June. (FIFO)
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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