ACCOUNT No. ACCOUNT Work in Process-Forging Department Balance Debit Credit Debit Credit Date Item June 1 Bal., 500 units, 40% completed 5,000 30 Direct materials, 3,700 units 54,200 49,200 30 30 Factory overhead Goods transferred, 3,600 units Direct labor 79,400 104,520 25,200 25,120 30 Bal., 600 units, 70% completed 30
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.
The following information concerns production in the Forging Department for June. The Forging Department uses the average cost method.
Attachment
a. Determine the cost per equivalent unit.
b. Determine cost of units transferred to Finished Goods.
c. Determine the cost of units in ending Work in Process.
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