Micro Inc. processes a single type of microchip in large quantities. For the current period the following information is given: Units Material Cost Conversion Cost Beginning Inventory 9,000 $18,360 $94,800 Started during the current period 72,000 $273,000 $409,200 Ending Inventory 12,000 All materials are added at the beginning of the production process. The beginning inventory was 40% complete as to conversion, while the ending inventory was 75% completed for conversion purposes. a. Calculate Micro’s physical flow of units, equivalent units, cost per equivalent unit and assign costs to Finished Goods and Ending Work-in-Process Inventories using the FIFO method of processing
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.
Micro Inc. processes a single type of microchip in large quantities. For the current period the following information is given:
| Units | Material Cost | Conversion Cost | |
| Beginning Inventory | 9,000 | $18,360 | $94,800 |
| Started during the current period | 72,000 | $273,000 | $409,200 |
| Ending Inventory | 12,000 |
All materials are added at the beginning of the production process. The beginning inventory was 40% complete as to conversion, while the ending inventory was 75% completed for conversion purposes.
a. Calculate Micro’s physical flow of units, equivalent units, cost per equivalent unit and assign costs to
Finished Goods and Ending Work-in-Process Inventories using the FIFO method of processing
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