The Zakchari Company has six processing departments for refining sugar—Affination, Carbonation, Decolorization, Boiling, Recovery, and Packaging. Conversion costs are added evenly throughout each process, and materials are added at the beginning of each process. Data from August for the Recovery Department are as follows: Metric Tons: Beginning Work-in-Process Inventory 3,000 Transferred In 18,500 Ending Work-in-Process Inventory 6,500 In August, 15,000 metric tons were completed and sent to the Packaging Department. The ending Work-in- Process Inventory was 50% complete with respect to conversion costs. Prepare a production cost report for the Recovery Department to show the equivalent units for direct materials and conversion costs. The weighted-average method is used.
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 Zakchari Company has six processing departments for refining sugar—Affination,
Carbonation, Decolorization, Boiling, Recovery, and Packaging. Conversion costs are added evenly throughout
each process, and materials are added at the beginning of each process. Data from August for the Recovery
Department are as follows:
| Metric Tons: | |
| Beginning Work-in-Process Inventory | 3,000 |
| Transferred In | 18,500 |
| Ending Work-in-Process Inventory | 6,500 |
In August, 15,000 metric tons were completed and sent to the Packaging Department. The ending Work-in-
Process Inventory was 50% complete with respect to conversion costs. Prepare a production cost report for
the Recovery Department to show the equivalent units for direct materials and conversion costs. The
weighted-average method is used.
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