Department S had no work in process at the beginning of the period. It added 11,000 units of direct materials during the period at a cost of $77,000. During the period, 8,250 units were completed, and 2,750 units were 38% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $59,200, and factory overhead was $8,200. The total conversion costs for the period were
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.
Department S had no work in process at the beginning of the period. It added 11,000 units of direct materials during the period at a cost of $77,000. During the period, 8,250 units were completed, and 2,750 units were 38% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $59,200, and factory overhead was $8,200.
The total conversion costs for the period were
Conversion cost = Direct labor cost + Factory overhead cost
Conversion cost are costs incurred to convert raw materials into finished goods.
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