Process costing with equivalent units and beginning inventory The records of Westminster Manufacturing Company for the month of May show the following costs in Department A: Beginning Inventory Direct Materials Direct Labor Overhead (150% of Direct Labor Cost) Total $ 120,750 405,000 535,500 803,250 $1,864,500 The beginning inventory for May consisted of 10,000 units which were 80% complete as to direct materials and 60% complete as to labor and overhead. A total of 100,000 units were completed and transferred out during May, and 20,000 units remained in the work in process inventory. The ending inventory was 80% complete as to direct materials and 40% complete as to labor and overhead. Compute the following: (a) Direct materials cost per equivalent unit: $ (b) Equivalent units of production for direct labor and overhead: (c) Total cost of 100,000 units completed: $ (d) Total cost of 20,000 units in process at the end of the month: $
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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