Oriole's is a brand of lotion created specifically for sensitive skin. The company, which goes by the same name, manufactures in small batches so the lotion retains its special qualities. The batch in process on December 31 included 150 units, determined to be 60% complete as to conversion costs. DM costs had already been added, as all DM is added at the very beginning of processing. During January, Oriole's started another 1,850 units, and by January 31, 1,900 units were completed, leaving 100 units still in process. Units in ending WIP Inventory were 50% complete for conversion costs. The following costs existed or were added to the WIP Inventory account in January. Total Costs DM Conversion Costs Costs in beginning WIP Inventory (from last period) $780 $320 $460 Costs added to WIP Inventory this period 3,340 1,480 1,860 Total costs to account for $4.120 $1.800 $2,320 (a) Assuming Oriole's uses the FIFO method of process costing, complete Steps 1 and 2 of the template to determine the equivalent units of work done during January. Total equivalent units of work done this period DM Conversion Cost
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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