The American-Made Company manufactures flags in a single process. The following information is available: Work in process inventory, Jan. 1: –0– units Units started in production 17,000 units Units completed and transferred out 12,000 units Work in process inventory, Dec. 31: 5,000 units Production costs: Direct materials $213,750 Direct labor 577,500 Manufacturing overhead 391,875 The units still in process are 45% complete with respect to direct materials and 35% complete with respect to conversion costs. 1. The equivalent units for direct materials are: 2. The equivalent units for conversion costs are: 3. The cost per equivalent unit for direct materials is: 4. The cost per equivalent unit for conversion costs is: 5. The total cost of units completed and transferred out is: 15. Refer to Table 4. The total cost of units in ending work in process inventory is:
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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