The following information is available for Department A for the month of January: Units Cost Work in process, January 1 (70% complete) 10,000 Direct materials P 36,000 Direct labor 18,000 Manufacturing overhead 24,000 Total work in process, January 1 P 78,000 Started in production during January 40,000 Costs added: Direct materials P108,000 Direct labor 48,000 Manufacturing overhead 61,040 Total costs added during January P217,040 Work in process, January 31 (80% complete) 4,000 Units completed and transferred out 42,000 Materials are added at the beginning of the process. Inspection takes place at the 50 percent point in the conversion process to determine spoiled units. Round unit costs to two decimal places. The company uses the weighted average cost flow assumption. Department A's cost per unit for materials using the weighted average method is a. P2.16. b. P2.88. c. P3.43. d. P3.60. Department A's conversion cost per unit using the weighted average method is a. P2.18. b. P2.22. c. P2.31. d. P3.20.
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 information is available for Department A for the month of January:
|
|
|
Units |
Cost |
|
|
Work in process, January 1 (70% complete) |
10,000 |
|
||
|
|
Direct materials |
|
P 36,000 |
|
|
|
Direct labor |
|
18,000 |
|
|
|
Manufacturing |
|
24,000 |
|
|
|
Total work in process, January 1 |
|
P 78,000 |
|
|
Started in production during January |
40,000 |
|
||
|
Costs added: |
|
|
||
|
|
Direct materials |
|
P108,000 |
|
|
|
Direct labor |
|
48,000 |
|
|
|
Manufacturing overhead |
|
61,040 |
|
|
|
Total costs added during January |
|
P217,040 |
|
|
Work in process, January 31 (80% complete) |
4,000 |
|
||
|
Units completed and transferred out |
42,000 |
|
||
Materials are added at the beginning of the process. Inspection takes place at the 50 percent point in the conversion process to determine spoiled units. Round unit costs to two decimal places. The company uses the weighted average cost flow assumption.
- Department A's cost per unit for materials using the weighted average method is
|
a. |
P2.16. |
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b. |
P2.88. |
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c. |
P3.43. |
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d. |
P3.60.
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