Required: Cost of production report for Department 2. 6-3. Cost of production report; spollage at end of process, both normal and abnormal. The Gas- sert Company uses process costing in its two producing departments. The following information pertains to Department 2 for November. Normal spoilage is 5% of output; inspection and identification of spoilage take place at the end of the process; materials are added after inspection. Department 2 received 14,000 units from Department 1 at a cost of $140,000. Department 2 costs were $12,000 for materials and $90,000 for conversion costs. A total of 8,000 units were completed and transferred to finished goods. At the end of the month, 5,000 units were still in process, estimated to be 60% complete as to conversion costs. Required: Cost of production report for Department 2. Biological Labora-
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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