Bigblue Corporation manufactures paint that goes through three processes - cracking, mixing, and cooking. This information was obtained for the mixing department for the month of July: Work-in-process, July 1 3,000 units Transferred-in costs, July 1 $35,000 Costs added by the department, July 1 Direct materials $17,400 (100 percent complete) Conversion $ 8,100 (60 percent complete) During the month of July, 12,000 units were transferred in from the cracking department at the cost of $240,000. Also, costs totaling $103,180 were added in the mixing department. Direct materials $58,300 Conversion $44,880 During the month, 8,000 units were completed and transferred to the cooking department. On July 31, the degree of completion of work-in-process was as follows: Direct materials 80 percent Conversion 45 percent REQUIRED: 1) Prepare the production cost report of the mixing department for the month of July using the weighted-average method. 2) Prepare the production cost report of the mixing department for the month of July using the 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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