Pureform, Incorporated, uses the FIFO method in its process costing system. It manufactures a product that passes through two departments Data for a recent month for the first department follow: Mork in process inventory, beginning Units started in process Units transferred out Work in process inventory, ending Cost added during the month 1. Equivalent units of production 2. Cost per equivalent unit Units 76,000 719,000 740,000 55,000 $ 1,029,645 $ 309,825 The beginning work in process inventory was 90% complete with respect to materials and 75% complete with respect to labor and overhead. The ending work in process inventory was 70% complete with respect to materials and 10% complete with respect to labor and overhead. Materials Answer is complete but not entirely correct. Overhead 688,500 $ Materials $ 68,400 Required: 1. Compute the first department's equivalent units of production for materials, labor, and overhead for the month. 2. Compute the first department's cost per equivalent unit for materials, labor, overhead, and in total for the month. (Round your answers to 2 decimal places.) Labor 688,500 1.55S 0.49 $ 710,100 112 $ Labor $ 30,200 Total Overhead. $ 41,900 3.16 $ 344,250
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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