Terry Linens Inc. manufactures bed and bath linens. The bath linens department sews terry cloth into towels of various sizes. Terry uses the weighted average method. All materials are added at the beginning of the process. The following data are for the bath linens department for August: Production: Units in process, August 1, 25% complete* 13,000 Units completed and transferred out 84,000 Units in process, August 31, 70% complete* 39,250 * With respect to conversion costs. Required: Calculate equivalent units of production for the bath linens department for August. Materials fill in the blank 1 equivalent units of production Conversion fill in the blank 2 equivalent units of production
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.
Terry Linens Inc. manufactures bed and bath linens. The bath linens department sews terry cloth into towels of various sizes. Terry uses the weighted average method. All materials are added at the beginning of the process. The following data are for the bath linens department for August:
| Production: | |
| Units in process, August 1, 25% complete* | 13,000 |
| Units completed and transferred out | 84,000 |
| Units in process, August 31, 70% complete* | 39,250 |
| * With respect to conversion costs. |
Required:
Calculate equivalent units of production for the bath linens department for August.
| Materials | fill in the blank 1 equivalent units of production |
| Conversion | fill in the blank 2 equivalent units of production |
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