PROBLEM: The Cutting Department uses process costing. Data are as follows: Jan 1 (beginning inventory of WIP) 20,000 units Units started during the year 45,000 units Units completed and transferred to finished goods 60,000 units Materials are added at the beginning of the process. The work in process, JAN.1 was 80% completed as to conversion costs. The work in process, DEC.31 was 70% completed as to conversion costs. Compute equivalent units for direct materials and conversion costs using the FIFO METHOD: Compute equivalent units for direct materials and conversion costs using the WEIGHTED AVERAGE METHOD:
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: The Cutting Department uses
Jan 1 (beginning inventory of WIP) 20,000 units
Units started during the year 45,000 units
Units completed and transferred to finished goods 60,000 units
Materials are added at the beginning of the process.
The work in process, JAN.1 was 80% completed as to conversion costs.
The work in process, DEC.31 was 70% completed as to conversion costs.
- Compute equivalent units for direct materials and conversion costs using the FIFO METHOD:
- Compute equivalent units for direct materials and conversion costs using the WEIGHTED AVERAGE METHOD:
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
