The pasting department at Elmers glue factory had 300 gallons in beginning work in progress inventory (40% complete). During the period, 8,400 gallons were completed. The end work in progress inventory was 1,300 gallons (20% complete). What are the total equivalent units for direct materials of materials are added at the beginning of the process?
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 pasting department at Elmers glue factory had 300 gallons in beginning work in progress inventory (40% complete). During the period, 8,400 gallons were completed. The end work in progress inventory was 1,300 gallons (20% complete). What are the total equivalent units for direct materials of materials are added at the beginning of the process?
Process costing: Process costing is used when there is a continuous manufacturing process. The direct and indirect cost incurred are traced, accumulated and allocated to the products produced in manufacturing process in a period. In the process costing average cost per unit is computed for produced units.
The manufacturing process is a continuous process. Units are under work in process in the production. So, previous period semi-finished work in process units will become the beginning work in process units of the subsequent period. The number of equivalent units of production are calculated from incomplete units by multiplying percentage of completion with total units.
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