Physical Units Beginning Work in process inventory (CC 75% complete) 12,000 Units started during current month 74,000 Units completed and transferred out during current month: 65,000 Ending Work in process inventory (CC 80% complete) 18,000 Inspection occurs when production is 100 percent completed. Normal spoilage is 4 percent of good units that successfully pass the inspection point in current month. BWIP cost direct materials was $216,000 and conversion cost was $27,000 Cost added during the month, direct materials 1,346,800 and conversion cost was 234,880 Compute total normal spoilage cost?
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.
At Rebecca's Company, direct materials direct materials are added at the start of the process and conversion costs Conversion cost are added evenly during the process. Company is using FIFO Method.
The following is given for a baking department for month of May:
|
|
Physical Units |
|
Beginning Work in process inventory (CC 75% complete) |
12,000 |
|
Units started during current month |
74,000 |
|
Units completed and transferred out during current month: |
65,000 |
|
Ending Work in process inventory (CC 80% complete) |
18,000 |
Inspection occurs when production is 100 percent completed. Normal spoilage is 4 percent of good units that successfully pass the inspection point in current month.
BWIP cost direct materials was $216,000 and conversion cost was $27,000
Cost added during the month, direct materials 1,346,800 and conversion cost was 234,880
Compute total normal spoilage cost?
PLease help.
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