Equivalent Usts of Production Kellogg Company (K) manufactures cold cereal products, such as Frosted Flakes Assume that the inventory in process on March 1 for the Packing Department included 1,200 pounds of cereal in the packing machine hopper (enough for 800 24-oz. boxes), and 500 empty 24-oz. boxes held in the package carousel of the packing machine. During March, 65,400 boxes of 24-oz. cereal were packaged. Conversion costs are incurred when a box is filled with cereal. On March 31, the packing machine hopper held 900 pounds of cereal, and the package carousel held 600 empty 24-or. (1-pound) boxes. Assume that once a box is filled with cereal, it is immediately transferred to the finished goods warehouse. Determine the equivalent units of production for cereal, boxes, and conversion costs for March. An equivalent unit is defined as "pounds" for cereal and "24-oz. boxes for boxes and conversion costs. If an amount is zero, enter in "0" Kellogg Company Equivalent Units of Production for Cereal, Boxes, and Conversion Cost For March Inventory in process, March 11 Started and completed in March Transferred to finished goods in March Inventory in process, March 31 Tocal Cereal (in pounds) Boxes (in boxes) Conversion Cost (in boxes)
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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