Weighted-average method, spoilage. LogicCo is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. LogicCo uses the weighted- average method of process costing. Summary data for September 2017 are as follows: Page Layout Data Home Insert Formulas Review View в Physical Units (Computer Chips) Direct Conversion 1. Materials Costs 2 Work in process, beginning inventory (September 1) Degree of completion of beginning work in process 4 Started during September 5 Good units completed and transferred out during September 6 Work in process, ending inventory (September 30) Degree of completion of ending work in process 8 Total costs added during September 9 Normal spoilage as a percentage of good units 10 Degree of completion of normal spoilage 11 Degree of completion of abnormal spoilage 900 $125,766 $ 10,368 100% 30% 2,754 2,500 490 100% 10% $619,650 $253,098 15% 100% 100% 100% 100%
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.
Summarize the total costs to account for; calculate the cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process.
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