Minions Company manufactures a product through a continuous single-step process. All materials are added at the beginning of processing. Production and cost data of Minions Company for the month of September follows: Production data: In process, September 1 (37.50% converted) : 8,000 units Started during September: 20,000 units Completed and transferred to finished goods: 25,500 units In process, September 30 (80% converted): 2,500 units Manufacturing costs: Work in process (WIP), Beginning : P24,500 Materials: P80,000 Direct labor cost: P96,500 Factory overhead cost : P75,000 Required: Prepare a cost of production report for the month of September. Use the first-in, first-out process costing approach.
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.
Minions Company manufactures a product through a continuous single-step process. All materials are added at the beginning of processing. Production and cost data of Minions Company for the month of September follows:
Production data:
In process, September 1 (37.50% converted) : 8,000 units
Started during September: 20,000 units
Completed and transferred to finished goods: 25,500 units
In process, September 30 (80% converted): 2,500 units
Manufacturing costs:
Work in process (WIP), Beginning : P24,500
Materials: P80,000
Direct labor
Factory
Required:
Prepare a cost of production report for the month of September. Use the first-in, first-out
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