Ramos Corp. uses a process costing system to assign costs to its steel production. During March, Ramos had beginning Work in Process Inventory of 288,000 tons steel (100 percent complete as to material and 65 percent complete as to conversion). During the month, the raw material needed to produce 5,440,000 tons of ste was started in process. At month-end, 264,000 tons remained in WIP Inventory (100 percent complete as to material and 40 percent complete as to conversion).
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.
FIFO stands for First in first out, which is a method of inventory valuation and this method states that the inventory which is purchased first would be sold or disposed of first.
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