ACCOUNT Work in Process-Papermaking Department ACCOUNT NO. Balance Debit Credit Debit Credit Date Item Mar. 1 Bal., 2,600 units, 35% completed Direct materials, 105,000 units 9,139 31 330,750 40,560 54,795 339,889 380,449 Direct labor 31 31 Factory overhead 31 Goods transferred, 103,900 units 31 Bal., 3,700 units, 80% completed 435,244
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.
Lighthouse Paper Company manufactures newsprint. The product is manufactured in two departments, Papermaking and Converting. Pulp is first placed into a vessel at the beginning of papermaking production. The following information concerns production in the Papermaking Department for March:
Attachment
a. Prepare the following March
1. The materials charged to production
2. The conversion costs charged to production
3. The completed production transferred to the Converting Department
b. Determine the Work in Process—Papermaking Department March 31 balance.
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