The assembly division of QTP, Inc. uses the FIFO method of process costing. Consider the following data for May 2020: Beginning work in process (May 1)a Started in May 2020 Physical Units (Watches) 100 510 450 160 Completed during May 2020 Ending work in process (May 31)b Total costs added during May 2020 aDegree of completion: direct materials, 80%; conversion costs, 35%. Degree of completion: direct materials, 80%; conversion costs, 40%. Requirement Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule. Work in process, beginning Started during current period Direct Conversion Materials Costs $459,888 $142,570 Enter the physical units in first, then calculate the equivalent units. Flow of Production Accounted for $3,237,000 $1,916,000 To account for Completed and transferred out during current period: From beginning work in process Started and completed Work in process, ending Equivalent unts of work done in current period Physical Units
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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