(Paint) Work in process, October 1* 20 $ 460,000 $ 120,000 Started during October 2017 80 Completed during October 2017 90 Work in process, October 31† 10 Costs added during October 2017 $ 2,000,000 $ 935,000 * Degree of completion: direct materials, ? % conversion costs, 60%. † Degree of completion: direct materials, ? % conversion costs, 70%.
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.
Cari Colors is a manufacturer of a specialized paint. All paint go through an identical
manufacturing process. Every effort is made to ensure that all paint are identical and meet
many demanding performance specifications. The product-costing system at the POS plant
has a single direct-cost category (direct materials) and a single indirect-cost category
(conversion costs). All paint passes through two departments –the Mixing Department and
the Testing Department. Direct materials are added to the beginning of the process in Mixing.
Conversion costs are added evenly throughout the two departments. When Mixing
Department finishes work on the paint, it is immediately transferred to Testing.
Cari Colors uses the Weighted-average method of
Department for October 2017 are.
Summarize the total Mixing Department costs for October 2017, and assign these
costs to units completed (and transferred out) and to units in ending work in process
using the Weighted-average method.
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