Star Inc. manufactures a product that passes through two processes: mixing and packaging. All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for June is as follows: Work in process, June 1: Units (30% complete) 15,000 Direct materials $4,000 Direct labor $3,000 Overhead $2,376 During June, 100,000 units were completed and transferred to packaging. The following costs were incurred by the mixing department during June: Direct materials Direct labor $50,000 $30,000 $12,000 On June 30, 8,000 units that were 70 percent complete remained in the mixing department. Overhead Use the weighted average method and round unit coste to two decimal places
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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