Beginning WIP 50,000 70,000 Work to be done for the period 80% 30% Ending WIP 20,000 17,500 Work completed 2/3 60% Started 150,000 Costs Beginning WIP Transferred In ------ P285,450 Materials P135,000 214,875 Conversion Costs P97,500 280,725 Current Transferred In ? Materials P1980,000 P840,000 Conversion Costs P3088,800 P1282,500
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.
XYXZ Manufacturing Company applies
|
Units |
Dept 1 |
Dept 2 |
|
Beginning WIP |
50,000 |
70,000 |
|
Work to be done for the period |
80% |
30% |
|
Ending WIP |
20,000 |
17,500 |
|
Work completed |
2/3 |
60% |
|
Started |
150,000 |
|
|
|
|
|
|
Costs |
|
|
|
Beginning WIP |
|
|
|
Transferred In |
------ |
P285,450 |
|
Materials |
P135,000 |
214,875 |
|
Conversion Costs |
P97,500 |
280,725 |
|
Current |
|
|
|
Transferred In |
|
? |
|
Materials |
P1980,000 |
P840,000 |
|
Conversion Costs |
P3088,800 |
P1282,500 |
Additional Information are as follows:
- Manufacturing starts at Department 1 where all materials are added at start of production and FIFO costing is used.
- Units are added in the Department 2 where 50% of direct materials as added when it is 30% complete and excess when it is ready to be transferred to the storeroom. This department uses weighted average costing method.
Required:
Make a cost of production report for Department 1.
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