Mullins Corporation uses the first-in, first-out method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory: Units in beginning work in process inventory 700 Materials costs $ 11,500 Conversion costs $ 22,200 Percent complete with respect to materials 75% Percent complete with respect to conversion 65% Units started into production during the month 8,600 Units transferred to the next department during the month 7,800 Materials costs added during the month $ 159,300 Conversion costs added during the month $ 348,500 Ending work in process inventory: Units in ending work in process inventory 1,500 Percent complete with respect to materials 65% Percent complete with respect to conversion 50% The cost per equivalent unit for conversion costs for the first department for the month is closest to: $48.79 $43.05 $44.68 $45.20
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.
Mullins Corporation uses the first-in, first-out method in its
| Beginning work in process inventory: | |
|---|---|
| Units in beginning work in process inventory | 700 |
| Materials costs | $ 11,500 |
| Conversion costs | $ 22,200 |
| Percent complete with respect to materials | 75% |
| Percent complete with respect to conversion | 65% |
| Units started into production during the month | 8,600 |
| Units transferred to the next department during the month | 7,800 |
| Materials costs added during the month | $ 159,300 |
| Conversion costs added during the month | $ 348,500 |
| Ending work in process inventory: | |
| Units in ending work in process inventory | 1,500 |
| Percent complete with respect to materials | 65% |
| Percent complete with respect to conversion | 50% |
The cost per equivalent unit for conversion costs for the first department for the month is closest to:
|
$48.79
|
||
|
$43.05
|
||
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$44.68
|
||
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$45.20
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