Required: A. How many units were completed during the period? Answer the following using the FIFO method: B. What are the equiv
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.
The following information is available for Department A for the month of January:
|
|
Units |
Cost |
|
Work in process, January 1 (70% complete as to conversion) |
10,000 |
|
|
Direct materials |
|
$ 36,000 |
|
Direct labor |
|
18,000 |
|
Manufacturing overhead |
|
24,000 |
|
Total work in process, January 1 |
|
$ 78,000 |
|
Started in production during January |
40,000 |
|
|
Costs added: |
|
|
|
Direct materials |
|
$108,000 |
|
Direct labor |
|
48,000 |
|
Manufacturing overhead |
|
60,600 |
|
Total costs added during January |
|
$216,600 |
|
Work in process, January 31 (80% complete as to conversion) |
4,000 |
|
Materials are added at the end of the process.
Required:
A. How many units were completed during the period?
Answer the following using the FIFO method:
B. What are the equivalent units for materials and conversion costs for the period?
C. What is the cost per equivalent unit for materials and conversion cost for the period?
D. What is the total cost of units completed and transferred out during the period?
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