Question One: The following data has been provided by Palafox Inc., a company that uses the FIFO method in its process costing system. The data concern the company's Shaping Department for the month of March. Cost in beginning work-in-process inventory............ $2,260 Units started and completed this month........ 4,650 Cost per equivalent unit. Equivalent units required to complete the units in beginning work-in-process inventory.. Equivalent units in ending work-in-process inventory Materials Conversion $33.30 $21.20 300 380 230 297 Required: Determine the cost of ending work-in-process inventory and the cost of the units transferred out of the department during March using the 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.
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