Victory Company uses weighted average process costing. The company has two production processes. Conversion cost is added evenly throughout each process. Direct materials are added at the beginning of the first process. Additional information for the first process follows. Direct Materials Conversion Units Percent Complete Percent Complete Beginning work in process inventory Units started this period 71,000 100% 80% 892,000 Units completed and transferred out Ending work in process inventory 760,000 203,000 100% 70% Beginning work in process inventory Direct materials Conversion Costs added this period Direct materials Conversion $ 438,165 112,763 2,932,335 2,142,487 $ 550,928 5,074,822 Total costs to account for $ 5,625,750 uired: ompute equivalent units of production for both direct materials and conversion. Equivalent Units of Production (EUP) - Weighted Average Method al units Units Direct Materials Percent Complete EUP Percent Complete Conversion EUP
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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