Q: FIFO The following information is available for production company Carley. Assume that WIP units are 100% completed in terms of materials, but not in terms of conversion. All direct materials are put in at the start of process. Conversion costs are added evenly during the process. WIP WIP 01-Dec-X1 31-Dec-X1 A. 1 587 348 B. 1 607 200 C. 1 607 360 D. 1 544 360 Units 1 000 800 Correct Answer: C 8 200 Degree of conversion 40% 20% Materials 90 000 Completed in December Added in December According to the FIFO-method, the total cost of the finished goods in December is closest to: In € 720 000 Conversion 50 360 835 800
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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