Fact Pattern: A.P. Hill Corporation uses a process-costing system. Products are manufactured in a series of three departments. The following data relate to Department Two for the month of February: Beginning work-in-process (70% complete) Goods started in production Ending work-in-process (60% complete) The beginning work-in-process was valued at $66,000, consisting of $20,000 of transferred-in costs, $30,000 of materials costs, and $16,000 of conversion costs. Materials are added at the beginning of the process; conversion costs are added evenly throughout the process. Costs added to production during February were Transferred-in $16,000 Materials used $88,000 Conversion costs $50,000 Assume that the company uses the first-in, first-out (FIFO) method of inventory valuation. Under FIFO, how much materials cost did A.P. Hill transfer out of Department Two during February? $88,000 $111,350 10,000 units 80,000 units 5,000 units $112,500 $114,615
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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