The following details are available in respect of Process I for the nonth of January 2019 : Opening work in process (800 units) Units 'transferred in' from previous process (9200 units) Labour cost $ 4,000 $36,800 $16,740 $8,370 7,900 units 1,200 units 900 units Overheads Units completed and transferred out to next process Units scrapped Closing WIP Degree of Completion : Units Scrapped Opening WIP 100% Closing WIP 100% 70% Materials 100% Labour & Overheads 60% 80% Normal loss is 8% of the total input including opening work in process. Scrap value is $4 per nit to be adjusted in direct materials cost. Assuming that FIFO method of inventory aluation is used, you are required to prepare : (i) Statement of equivalent production (ii) Statement showing cost per equivalent units.
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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