A textile mill completes their production in four process, spinning, dyeing, weaving and finishing. Direct materials are added last, then conversion costs are added incrementally throughout. The information below relates to the dyeing process for October 2022. Beginning work in process 25,000 units - Degree of completion; Transferred in costs 100%, Direct material 0% and Conversion costs 80%. During October 2022, 1,00,000 were transferred in and 105,000 units were completed and transferred out. Ending work in progress xxxx units - Degree of completion; Transferred in costs 100%, Direct material 0% and Conversion costs 40%. Required: Determine equivalent units using a) weighted average method and b) FIFO method.
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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