When computing the cost per equivalent unit the weighted-average method of process costing, the cost per equivalent unit is computed by dividing
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.
When computing the cost per equivalent unit the weighted-average method of
Weighted Average Method :— Under this method, equivalent units is calculated by adding equivalent units transferred out and equivalent units of ending WIP.
Equivalent units transferred out is calculated by multiplying units transferred out with 100%.
Equivalent units of ending WIP is calculated by multiplying units in ending WIP with stage of completion.
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