The Evanston plant of Fit-for-Life Foods Corporation produces low-fat salad dressing. The following data pertain to the year just ended. Units 20,000 pound Direct Material. Conversion (Percentage of (Percentage of Completion) Completion) 60% 30% Work in process, January 1 80% 70% Work in process, December 31 15,000 pound During the year, the company started 120,000 pounds of material in production. Required: Prepare a schedule analyzing the physical flow of units and computing the equivalent units of both direct material and conversion for the year. Use weighted-average process costing. Work in process, January 1 Units started during the year CALCULATION OF EQUIVALENT UNITS: FIT-FOR-LIFE FOODS CORPORATION Weighted-Average Method Physical Units Total units to account for Unit completed and transferred out during the year. Work in process, December 31 Total units accounted for Total equivalent units 0 0 Percentage of Completion Direct Material % 100 % % Conversion 60 % 100% % Equivalent Units Direct Material Conversion
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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