Work-in-Process Inventory-Cutting Balance, May 1 0. WIP-Finishing Transfer out to Direct Materials 47,000 Direct Labor 13,000 Manufacturing Overhead 31,000 Balance, May 31 1,000
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.
Begin with the Work-in-Process———- Cutting T- acount, then complete each of the remaining T-accounts (Abbreviations used: COGS= Cost of Goods Sold, FG = Finished Goods, WIP = Work in-Process)
Work in process (WIP) also called in-process inventory are the company’s partially finished goods which are yet to be completed. The figures of WIP are listed in company’s balance sheet.
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