The HoneyButter Company makes flavored butter in 1 pound containers. At the beginning of March, the firm's Mixing Department already had 10,000 pounds of butter in production. During the month, the firm started 100,000 pounds, and completed 95,000 pounds and transferred them to the Packaging Department. All direct materials are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The Weighted Average method of process costing is used by HoneyButter. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 20% complete as to conversion costs. Other information about costs to date follow: Beginning inventory: Manufacturing costs added during the March accounting period Direct materials costs $ 1,800 Direct materials costs $154,400 Conversion costs $ 7,200 Conversion costs $ 90,800
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 HoneyButter Company makes flavored butter in 1 pound containers. At the beginning of March, the firm's Mixing Department already had 10,000 pounds of butter in production. During the month, the firm started 100,000 pounds, and completed 95,000 pounds and transferred them to the Packaging Department. All direct materials are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The Weighted Average method of
Beginning inventory:
Direct materials costs $ 1,800 Direct materials costs $154,400
Conversion costs $ 7,200 Conversion costs $ 90,800
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