Provost Industries is a company that uses a process cost accumulation system to charge products through 3 production departments. Data available in the Finishing department, which is the last department, as of October 2020: Physical Unit From Preceding Dept Direct Materials Conversion Work in process, Oct 1 450 €4,068 €1,980 €2,160 Degree of completion, WIP beginning 100% 100 % 60% Transferred from preceding departments 1,950 Work in process, Oct 31 600 Degree of completion, WIP ending 100% 50% 35% Total cost added during Oct €17,940 €6,210 €13,920 REQUESTED: Make a Production Cost Report for the Finishing department using the Average & FIFO 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.
- Provost Industries is a company that uses a
process cost accumulation system to charge products through 3 production departments. Data available in the Finishing department, which is the last department, as of October 2020:
|
|
Physical Unit |
From Preceding Dept |
Direct Materials |
Conversion |
|
Work in process, Oct 1 |
450 |
€4,068 |
€1,980 |
€2,160 |
|
Degree of completion, WIP beginning |
|
100% |
100 % |
60% |
|
Transferred from preceding departments |
1,950 |
|
|
|
|
Work in process, Oct 31 |
600 |
|
|
|
|
Degree of completion, WIP ending |
|
100% |
50% |
35% |
|
Total cost added during Oct |
|
€17,940 |
€6,210 |
€13,920 |
REQUESTED:
Make a Production Cost Report for the Finishing department using the Average & FIFO method
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