Questions 14 – 17 are based on the following Chen Company produces a product in a two-department process, Assembly and Finishing. The following information is available on their first department, Assembly: Beginning Work-in-process Units started Units completed and transferred to Finishing Ending Work-in-process Direct Material Added Direct Labour Factory Overhead Total cost to account for -0- 200,000 168,000 32,000 $700,000 960,000 480,000 2,140,000 The units still in process are 100% complete with respect to direct materials and 75% complete with respect to conversion costs. 14. The unit cost of direct materials is: (A) $3.50 (C) $3.65 (B) $4.17 (D) $0.29 The unit cost for conversion costs is: (A) $5.00 (B) $2.50 (C) $7.20 (D) $7.50 The total cost of units completed and transferred to finished goods is: (A) $2,112,000 (B) $2,140,000 (C) $1,848,000 (D) $352,000
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.
Questions 14 – 17 are based on the following Chen Company produces a product in a two-department process, Assembly and Finishing. The following information is available on their first department, Assembly: Beginning Work-in-process Units started Units completed and transferred to Finishing Ending Work-in-process Direct Material Added Direct Labour Factory Overhead Total cost to account for -0- 200,000 168,000 32,000 $700,000 960,000 480,000 2,140,000 The units still in process are 100% complete with respect to direct materials and 75% complete with respect to conversion costs. 14. The unit cost of direct materials is: (A) $3.50 (C) $3.65 (B) $4.17 (D) $0.29
The unit cost for conversion costs is: (A) $5.00 (B) $2.50 (C) $7.20 (D) $7.50
The total cost of units completed and transferred to finished goods is: (A) $2,112,000 (B) $2,140,000 (C) $1,848,000 (D) $352,000
The total cost of ending work-in-process is: (A) $352,000 (B) $292,000 (C) $264,000 (D) $240,000
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