The following information is available regarding process A for the month of February, 2019 : Production Record; Units in process as on 1-2-2019 (all materials used, 25% complete for labour and overheads) New units introduced Amount ($) 4,000 16,000 14,000 Units completed Units in process as on 28-2-2019 (all materials used, 33% complete for labour and overhead 6,000 Cost Record: WIP as on 1-2-2019 Materials Атount ($) 6,000 1,000 1,000 Labour Overheads 8,000 Cost During the Month : Materials Labour Overheads Атоunt ($) 25,600 15,000 15,000 55,600 Presuming the average method of inventory is used, prepare : (i) Statement of equivalent production (ii) Statement showing cost of each element
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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