Topic: Problem: Process Costing Publishers, Inc., has two departments: printing and binding. Each department has one direct-cost category (direct materials) and one indirect-cost category (conversion costs). This focuses on the binding department. Books that have undergone the printing process are immediately transferred to the binding department. Direct material and Conversion costs are added evenly during binding operations. When those operations are done, the books are immediately transferred to Finished Goods. Publishers, Inc., uses the FIFO method of process costing. The following is a summary of the April 2017 operations of the binding department. Beginning work in process Degree of completion, beginning work in process Transferred in during April 2017 Completed and transferred out during April Ending work in process, (April 30) Degree of completion, ending work in process Total costs added during April Physical Units (books) 1,260 2,880 3,240 900 Transferred- In Costs 39,060 100% 100% 155,520 Direct Materials 14,000 50% Conversion Costs 70% 28,188 16,380 50% 70% 84,240
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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