Preparation of Process Accounts (With Closing WIP but no process losses) Practice Problem 8 In process A on 1st March, there was no work-in-progress. During the month of March, 2,000 units of material were issued at a cost of RO 18,000. Labour and overheads totaled RO 9,000 and RO 6,600 respectively. On 31st March, 1,500 units were completed and transferred to the next process. On the remaining 500 units, which are incomplete, degree of completion was as follows Materials 100% Labour 60% Overhead 30% Prepare (a) Statement of Equivalent Production (b) Statement of Cost (c) Statement of Evaluation (d) Process Account
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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