Nasiraandin company started operations in the current month. During the month, 10,000 units were started in Department 1. Of the units started, 1,000 units were spoiled at the end of the process which is considered abnormal in the operations of the company. 7,000 units were transferred to Department 2, and 2,000 remained in work in process at the end of the month, which was 100% complete as to materials and 50% complete as to conversion costs. Materials costs of P30,000 and conversion costs of P45,000 were charged to Department 1 in the current month. What was the cost of work in process ending inventory?
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.
Nasiraandin company started operations in the current month. During the month, 10,000 units were started in Department 1. Of the units started, 1,000 units were spoiled at the end of the process which is considered abnormal in the operations of the company. 7,000 units were transferred to Department 2, and 2,000 remained in work in process at the end of the month, which was 100% complete as to materials and 50% complete as to conversion costs. Materials costs of P30,000 and conversion costs of P45,000 were charged to Department 1 in the current month. What was the cost of work in process ending inventory?
P8,000
P11,000
P16,000
P56,000
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
