Pumpkin Company processes wood pulp for manufacturing various paper products. The company employs a process costing system for its manufacturing operations. All direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. This is the company's production quantity schedule for March: Percent Completed Materials 100% Tons of Pulp 1,500 5,000 4500 Conversion Cost 30% Work in process Inventory, Mar. 1 Units started during March Total units to account for Units from beg, WIP, which were completed And transferred out during Mar. 1,500 Units started and completed during Mar. Work in process inventory, Mar.31 Total units accounted for 4,000 1,000 6500 100% 60% And the following costs data were available: Work in process inventory, Mar. 1: Direct Materials P 20,750 23,470 Conversion Cost incurred during March: Direct Materials Conversion PB0,000 S8880 Using FIFO method, the equivalents units of conversion cost during March is
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.
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