Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. Equivalent Units of Production Units Completed and transferred out Units in Ending Work in Process: Direct Materials (12,000 x 100%) Conversion (12,000 × 70%) Direct Materials Conversion 80,000 80,000 12,000 8,400 Equivalent Units of Production 92,000 88,400 Cost per Equivalent Unit Costs of beginning work in process Costs incurred this period $ 41,600 $ 61, 200 139,400 187,600 Total costs $181,000 $248,800 Cost per equivalent unit 2$ 1.97 per EUP $ 2.81 per EUP The total materials costs transferred out of the Canning Department equals:
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.
Following is a partial
| Equivalent Units of Production | Direct Materials | Conversion | ||||||||
| Units Completed and transferred out | 80,000 | 80,000 | ||||||||
| Units in Ending Work in Process: | ||||||||||
| Direct Materials (12,000 × 100%) | 12,000 | |||||||||
| Conversion (12,000 × 70%) | 8,400 | |||||||||
| Equivalent Units of Production | 92,000 | 88,400 | ||||||||
| Cost per Equivalent Unit | ||||||||||
| Costs of beginning work in process | $ | 41,600 | $ | 61,200 | ||||||
| Costs incurred this period | 139,400 | 187,600 | ||||||||
| Total costs | $ | 181,000 | $ | 248,800 | ||||||
| Cost per equivalent unit | $ | 1.97 | per EUP | $ | 2.81 | per EUP | ||||
The total materials costs transferred out of the Canning Department equals:
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