A sporting goods manufacturer buys wood as a direct material for baseball bats. The Forming Department processes the baseball bats, and the bats are then transferred to the Finishing Department where a sealant is applied There was no beginning work in process inventory in the Forming Department in May. The Forming Department began marufacturing 10,000 Casey Slugger baseball bats during May. Costs for the Forming Department for the month of May were as follows: Direct materials 33,000.00 Conversion cost 17,000.00 A total of 8,000 bats were completed and transferred to the Finishing Department during May. The ending work in process inventory was 1O0% complete with respect to direct materials and 25% complete with respect to conversion costs. The company uses the weighted-average method of process costing.
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 cost of the units transferred to the Finishing Department during May was
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