The Cutting Department is the first stage of ABC Company's production cycle. Beginning WIP inventory for this department was 60% incomplete as to conversion costs. Ending WIP was 25% complete. Information as to conversion osts in the Cutting Department for September is presented as follows: Units Conversion Cost WIP at September 1 Units started and cost incurred during September 202,500 Units completed and transferred to next department during September P 31,650 296,100 37,500 150,000 Required: a. Using FIFO method, the total conversion cost of units transferred to finished goods from the units in process beginning. b. Using the weighted average method, the conversion cost of WIP in the Cutting Department at September 30
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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