Question 03: CPR Abnormal Loss in second department: During the month of may 20xx department No.2 of Halton company received 60,000 units at the rate of 14.50 dollars from department one. Then it transferred out 33000 completed units. In the department there was an abnormal loss of 4000units when 85 percent converted. In Department 2 all the material are added at the beginning of the process. Direct Material added during the month totaled 272,500 dollars and conversion cost is 216,000 dollars. Make a cost of production report for department 2.
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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