Prepare the department's equivalent units of production for direct materials for each of the three separate assumptions using the FIFO method. Total The first production department in a process manufacturing system reports the following unit data. Beginning work in process inventory Units started and completed Units completed and transferred out Ending work in process inventory Equivalent Units of Production (EUP) FIFO Method 1. All direct materials are added to products when processing begins. Units Total 26,400 units 61,600 units 88,000 units 16,400 units Total Units 2. Beginning inventory is 40% complete as to direct materials costs. Ending inventory is 70% complete as to direct materials costs. Direct Materials Units Percent Added EUP Direct Materials Percent Added 3. Beginning inventory is 60% complete as to direct materials costs. Ending inventory is 30% complete as to direct materials costs. EUP Percent Added Direct Materials EUP
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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