The Fabric Department of Vetements Ltd., a producer of fabric for Broadway Shows, has the following information regarding costs and output for May: Units: Opening work-in-process inventory: 0 units Started and completed: 222,000 units Started and still in process at May 31: 55,500 units Direct materials: 100% complete Conversion costs: 60% complete The company uses the FIFO method of process costing. Required: 1. Prepare a quantity schedule showing the computation of the equivalent units of production for May. The company is interested in learning if there will be a difference between the WACM and FIFO approaches for data for May. (Round cost per equivalent unit to 2 decimal places.) Beginning work in process Poduction activity in the period Beginning work in process Started into production Started and completed Costs: Direct materials: $1,015,650 Direct labour: $65,500 Factory overhead: $496,160 Physical Units Equivalent Units Processed Direct Materials To account for Accounted for (EU-DOC Physical units) DOC EU % Conversation Cost (EU-DOC Physical units) DOC EU a
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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