Zebra Company manufactures Product Z in a two-stage production cycle in Departments A and B. Materials are added at the beginning of the process in Department B. Zebra uses the weighted-average method. Conversion costs for Department B were 40% complete as to the 15,000 units in the beginning work-in-process (WIP) inventory and 50% complete as to the 21,000 units in the ending work-in-process inventory. 30,000 units were completed and transferred out of Department B during October. An analysis of the costs relating to work-in-process inventories and production activity in Department B for October follows: WIP, October 1: Costs added in October Multiple Choice O $2.80 Transferred- in Costs $ 30,000 72,000 The total cost per equivalent unit transferred-out for October of Product Z. rounded to the nearest penny, was: $2.90 Materials Costs $9,000 16,500 Conversion Costs $3,000 13,200
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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