Overton Company has gathered the following information. Units in beginning work in process 21,700 Units started into production 228,300 Units in ending work in process 24,400 Percent complete in ending work in process: Conversion costs 60 % Materials 100 % Costs incurred: Direct materials $100,000 Direct labor $366,352 Overhead $186,200 Compute equivalent units of production for materials and for conversion costs. Materials Conversion Costs The equivalent units of production Determine the unit costs of production. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials Conversion Costs Unit costs $ $ Show the assignment of costs to units transferred out and in process. Transferred out $ Ending work in process $
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.
| Units in beginning work in process | 21,700 | ||
| Units started into production | 228,300 | ||
| Units in ending work in process | 24,400 | ||
| Percent complete in ending work in process: | |||
| Conversion costs | 60 | % | |
| Materials | 100 | % | |
| Costs incurred: | |||
| Direct materials | $100,000 | ||
| Direct labor | $366,352 | ||
| |
$186,200 |
|
Materials
|
Conversion Costs
|
|||
| The equivalent units of production |
|
|
|
Materials
|
Conversion Costs
|
|||
| Unit costs |
$
|
$
|
| Transferred out |
$
|
|
| Ending work in process |
$
|
Working:
Units Completed:
= Beginning Units + Units started - Ending Units
= 21,700 + 228,300 - 24,400
= 225,600
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