Production data show 35,820 units were transferred out of a stage of production and 6,200 units remained in ending WIP inventory that was 100% complete to material and 40% complete to conversion. The unit material cost is $5 for material and $7 for conversion. What is the amount of inventory transferred out and remaining in ending work in process inventory? Transferred out $ 429,840 Ending inventory $ 48,360
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.
Equivalent Units: Equivalent units of production (EUP) is a managerial accounting calculation that estimates the number of units that could have been started and completed if all resources were devoted to these units during a period. In other words, this is the highest number of units a factory could produce during a period at a given cost if all efforts were to use one type of unit.
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