ACCOUNT Work in Process-Roasting Department ACCOUNT NO. Balance Debit Credit Debit Credit Date Item 1 Bal., 10,500 units, 75% completed 21,000 267,800 403,500 31 Direct materials, 210,400 units 246,800 31 31 Factory overhead Direct labor 135,700 168,630 572, 130 31 Goods transferred, 208,900 units 31 Bal., ? units, 25% completed
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.
Sunrise Coffee Company roasts and packs coffee beans. The process begins in the Roasting Department. From the Roasting Department, the coffee beans are transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at December 31:
Attachment
Instructions
Prepare a cost of production report, using the average cost method, and identify the missing amounts for Work in Process—Roasting Department.
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