ABC Company has several processing departments. Costs to be accounted for in the assembly department for October were, $ 1,202,400. Work in Process Inventory, Oct 1 $29,000 Direct Materials $16,500 Conversion Costs $916,000 Direct Materials Added During Oct $100,000 Direct Labour $140,900 Manufacturing Overhead 25,000 units were in beginning work in process. 425,000 units started this month. 35,000 units in ending inventory. 40% complete in terms of conversion costs. 100% of Direct Materials are added at the start. Instructions Using the Weighted-Average Method, A. Determine the equivalent units of production and unit production costs for the assembly department. B. Determine the assignment of costs to goods completed and transferred out, and work in process inventory. C. Prepare a production cost report for the assembly department for October.
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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