Pet Products Company uses an automated process to manufacture its pet replica products. For June, the company had the following activities: Beginning work in process inventory 4,500 items, 1/4 complete Units placed in production Units completed Ending work in process inventory Cost of beginning work in process Direct material costs, current Conversion costs, current 15,000 units 17,500 units 2,000 items, 3/4 complete P5,250 P16,500 P23,945 The company uses FIFO Method Direct materials are placed into production at the beginning of the process and conversion costs are incurred evenly throughout the 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.
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