he Cost Accountant of JL Manufacturing Corporation was tasked to present the different analyses for Department 2 using Process Costing. The company provided the following data for the second month of operation: There are 5,000 inventory units in-process at the beginning of February 2021 which are 60% complete. Department 2 received 40,000 newly started units for the month of February. At the end of the month, 35,000 were completed and transferred-out. In-process units at the end of month have 80% completion. No loss units. If Materials are added 100% at the end of the process and cost are unevenly applied. The Cost incurred by Department 2 for the February 2021 are as follows: Particulars Previous Cost Current Cost Incurred Cost fr preceding P24,000 P120,000 Materials P 52,500 P280,000 Conversion Costs P 24,500 P40,000 101,000 440,000 (A) Compute the unit cost for Department 2 at the End of February 2021 using 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.
The Cost Accountant of JL Manufacturing Corporation was tasked to present the different analyses for Department 2 using
There are 5,000 inventory units in-process at the beginning of February 2021 which are 60% complete. Department 2 received 40,000 newly started units for the month of February. At the end of the month, 35,000 were completed and transferred-out. In-process units at the end of month have 80% completion. No loss units.
If Materials are added 100% at the end of the process and cost are unevenly applied. The Cost incurred by Department 2 for the February 2021 are as follows:
|
Particulars |
Previous Cost |
Current Cost Incurred |
|
|
Cost fr preceding |
P24,000 |
P120,000 |
|
|
Materials |
P 52,500 |
P280,000 |
|
|
Conversion Costs |
P 24,500 |
P40,000 |
|
|
|
|
101,000 |
440,000 |
(A) Compute the unit cost for Department 2 at the End of February 2021 using FIFO Method
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