Reed Production has provided the following information for the year 2015: Direct Labor $153,000 Beginning Work-in-Process Inventory 62,500 Direct Materials Used 271,000 Ending Work-in-Process Inventory 53,850 Manufacturing Overhead 135,500 During the year, Reed produced 71,020 units of product. Calculate the unit product cost. A) $8.00 B) $10.00 C) $9.52 D) $7.88
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.
Reed Production has provided the following information for the year 2015:
|
Direct Labor |
$153,000 |
|
Beginning Work-in-Process Inventory |
62,500 |
|
Direct Materials Used |
271,000 |
|
Ending Work-in-Process Inventory |
53,850 |
|
Manufacturing |
135,500 |
During the year, Reed produced 71,020 units of product. Calculate the unit product cost.
- A) $8.00
- B) $10.00
- C) $9.52
- D) $7.88
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