Tread Industries uses a process costing system. Here are data regarding the work in process inventory of the first processing department for the month of August: August 1 Started Costs added during August Completed and transferred out O2,730 20,100 22,830 20,100 The units in beginning work in process inventory are 65% complete with respect to direct materials and 45% complete with respect to conversion costs. The units in ending work in process inventory are 50% complete with respect to direct materials and 35% complete with respect to conversion costs. What are the equivalent units of production for conversion costs during the month of August? 27,900 Units None of the above 3,600 24,300 Direct material costs $19,500 Conversion costs $22,800 $136,043 $160,542
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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