The following activity was recorded for a factory: Production Data: Equivalent Units Needed to Complete Beginning Inventory Material 2,200 Conversion 3,300 Units Started and Completed Material 12,000 Conversion 12,000 Equivalent Units of Ending Inventory Material 1,150 Conversion 2,300 Cost Data: Work in Process Inventory, July 1: Material Costs $4,605 Conversion Costs $7,040 Cost Added During the Month: Material Costs $32,542 Conversion Costs $33,616 What is the conversion cost per unit using the first-in, first-out (FIFO) 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 following activity was recorded for a factory:
| Production Data: | |
| Equivalent Units Needed to Complete Beginning Inventory |
|
| Material | 2,200 |
| Conversion | 3,300 |
| Units Started and Completed | |
| Material | 12,000 |
| Conversion | 12,000 |
| Equivalent Units of Ending Inventory | |
| Material | 1,150 |
| Conversion | 2,300 |
| Cost Data: | |
| Work in Process Inventory, July 1: | |
| Material Costs | $4,605 |
| Conversion Costs | $7,040 |
| Cost Added During the Month: | |
| Material Costs | $32,542 |
| Conversion Costs | $33,616 |
What is the conversion cost per unit using the first-in, first-out (FIFO) method?
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