Problem 11. During February, the Assembly Department received 60,000 units from the Cutting Department at a unit cost of P3.54. Costs added in the Assembly Department were: materials, P84,370; conversion costs, P129,710. Of the 60,000 units received. 50,000 were transferred out; 9,000 units were in process at the end of the month (all materials, 1/2 converted). The entire loss is considered abnormal and is to be charged to factory overhead. Inspection is done at the beginning of the process. Required: • 1. Equivalent production for materials and conversion costs. • 2. Total costs charged to factory overhead for the lost units. • 3. Costs of the units completed and transferred > 4. Costs of the units in process, end
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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