Product X is obtained after it passes through three distinct processes. The following cost information is available for the operation. Total Process 1 Process 2 Process 3 Direct materials added $15,084 $5,200 $3,960 $5,924 Direct wages 18,000 4,000 6,000 8,000 Production overhead 18,000 1,000 units @ $6.00 per unit were introduced in Process 1. Production overhead is to be distributed as a percentage of direct wages. Actual Output Units Normal Loss Scrap Value per Unit Process 1 950 5% $4.00 Process 2 840 10% $8.00 Process 3 750 15% $10.00 Prepare the process accounts and post your responses in the Discussion Forum.
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.
| Product X is obtained after it passes through three distinct | ||||
| processes. The following cost information is available for the | ||||
| operation. | ||||
| Total | Process 1 | Process 2 | Process 3 | |
| Direct materials added | $15,084 | $5,200 | $3,960 | $5,924 |
| Direct wages | 18,000 | 4,000 | 6,000 | 8,000 |
| Production |
18,000 | |||
| 1,000 units @ $6.00 per unit were introduced in Process 1. | ||||
| Production overhead is to be distributed as a percentage of direct | ||||
| wages. | ||||
| Actual Output Units | Normal Loss | Scrap Value per Unit | ||
| Process 1 | 950 | 5% | $4.00 | |
| Process 2 | 840 | 10% | $8.00 | |
| Process 3 | 750 | 15% | $10.00 | |
| Prepare the process accounts and post your responses in the | ||||
| Discussion Forum. |
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