Standard costing, journal entries. The Warner Company manufactures reproductions of expen- sive sunglasses. Warner uses the standard-costing method of process costing to account for the produc- tion of the sunglasses. All materials are added at the beginning of production. The costs and output of sunglasses for May 2017 are as follows: Physical % of Completion for Conversion Costs 60% Direct Materials Conversion Costs Work in process, beginning Started during May Completed and transferred out Work in process, ending Standard cost per unit Costs added during May Units 22,000 95,000 87,000 30,000 $ 48,400 $ 33,000 75% $ 2.20 $ 2.50 $207,500 $238,000
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.
Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule.
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