The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day. Beginning WIP inventory Direct materials $ 975 Conversion costs 542 Current period costs Direct materials 23,520 Conversion costs 16,555 Quantity information is obtained from the manufacturing records and includes the following. Beginning inventory 750 units (60% complete as to materials, 56% complete as to conversion) Current period units started 5,800 units Ending inventory 2,000 units (40% complete as to materials, 30% complete as to conversion) Compute the cost of goods transferred out and the ending inventory using the FIFO method. (Do not round intermediate calculations.)
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 Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day.
| Beginning WIP inventory | |||
| Direct materials | $ | 975 | |
| Conversion costs | 542 | ||
| Current period costs | |||
| Direct materials | 23,520 | ||
| Conversion costs | 16,555 | ||
Quantity information is obtained from the manufacturing records and includes the following.
| Beginning inventory | 750 | units | (60% complete as to materials, 56% complete as to conversion) |
| Current period units started | 5,800 | units | |
| Ending inventory | 2,000 | units | (40% complete as to materials, 30% complete as to conversion) |
Compute the cost of goods transferred out and the ending inventory using the FIFO method. (Do not round intermediate calculations.)
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