Problem IV Nicole Company employs a process costing system. A unit of product passes through three departments - Molding, Assembly, and Finishing , before it is completed. The following activity took place in the Finishing Department during May: Work in process, May 1 - 1,400 units; transferred in from the Assembly Department - 14,000; spoilage - 700; completed and transferred to finished goods inventory - 11,200. Direct material is added at the beginning of the processing in the Finishing Department without changing the number of units being processed. Conversion costs are added evenly throughout the process. The work in process inventory was 70% complete as to conversion costs in May 1 and 40% complete as to conversion costs on May 31. All spoilage is discovered at final inspection, which occurs immediately after the units are completed: 560 of the units spoiled were within the limit considered normal. Nicole Company employs the weighted average costing method. The costs per equivalent unit of production in May are as follows: transferred-in costs - P5.00; materials - P1.00 and conversion costs -P 3.00 Required: 1. Cost of the units completed and transferred 2. Cost charged to factory overhead control 3. Cost 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.
Problem IV Nicole Company employs a
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