True Company uses the First-In First-Out method of process costing. The following information is given for the company's Milling Department: units % complete for Materials % complete for Conversion Costs incurred Beginning Work in process 200 30% 40% Materials Conversion Units started 500 Beginning Work in process $1,500 $1,600 Units completed 600 Ending Work in process 100 20 50 During Current Period $13,440 $17,100 The following additional information is given: Cost per equivalent unit for Material: $24 Cost per equivalent unit for Conversion: $30 Cost of ending work in process: $1,980 The cost of 600 complete units is: A. $33,800 B. $31,660 C. $21,600 D. $28,560 E. $25,330
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.
QUESTION 50
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True Company uses the First-In First-Out method of
process costing . The following information is given for the company's Milling Department:units
% complete
for Materials
% complete
for Conversion
Costs incurred
Beginning
Work in process
200
30%
40%
Materials
Conversion
Units started
500
Beginning
Work in process
$1,500
$1,600
Units completed
600
Ending
Work in process
100
20
50
During Current Period
$13,440
$17,100
The following additional information is given:
Cost per equivalent unit for Material: $24
Cost per equivalent unit for Conversion: $30
Cost of ending work in process: $1,980
The cost of 600 complete units is:
A. $33,800
B. $31,660
C. $21,600
D. $28,560
E. $25,330
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