The Cutting Department is the first stage of Mark Company’s production cycle. Beginning work in process inventory for this department was 60% incomplete as to conversion costs. Ending work in process was 25% complete. Information as to conversion costs in the Cutting Department for November is as follows: Units Conversion Cost Work in process November 1 37,500 31,650 Units started and cost incurred during November 202,500 296,100 Units completed and transferred to next department during November 150,000 Answer the following: 1. The total conversion cost of units transferred to finished goods from the units in process beginning. Use FIFO method. 2. The conversion cost of work in process in the cutting department at November 30. Use Weighted Average Method.
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.
The Cutting Department is the first stage of Mark Company’s production cycle. Beginning work in process inventory for this department was 60% incomplete as to conversion costs. Ending work in process was 25% complete. Information as to conversion costs in the Cutting Department for November is as follows:
| Units | Conversion Cost | |
|
Work in process November 1 |
37,500 | 31,650 |
|
Units started and cost incurred during November |
202,500 | 296,100 |
|
Units completed and transferred to next department during November |
150,000 |
Answer the following:
1. The total conversion cost of units transferred to finished goods from the units in process beginning. Use FIFO method.
2. The conversion cost of work in process in the cutting department at November 30. Use Weighted Average Method.
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