Problem 9: Cost of Production Report The following data are available for the year 2020 for Tess Corp., which uses weighted-average process costing. Beginning inventory (40% complete) Units started during 2020 Units completed during 2020 Ending inventory (70% complete) Costs of inventory at beginning of 2020 Production costs incurred during 2020 15,000 units 260,000 units 250,000 units 25,000 units P13,750 P419,600 Required: a. Compute equivalent production for 2020. b. Compute the unit cost for the year 2020 to the nearest cent. c. Compute the cost of the ending inventory of work in process. d. Compute the cost of goods completed and transferred to finished goods. e. Tess now uses FIFO. Compute ending inventory of work in 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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