Kramer Corp. began the current period with 4,030 units in process that were 100% complete as to materials and 60% complete as to conversion. Costs of $7,500 in direct materials and $4,720 in conversion costs were incurred in manufacturing those units in the previous period. Kramer ended the current period with 20,100 units completed and 5,010 units still in process. Work in process was 100% complete as to materials and 70% complete as to conversion costs. Kramer incurred $68,000 in direct materials costs, $7,190 in direct labor costs, and $40,100 in manufacturing overhead costs during the period.
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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