Instruction: Answer the following questions and provide the necessary requirement. Problem 1 The October data for CPA Company are shown below: Department 1 25,000 Department Units started in process Units received from previous department Units transferred to finished goods inventory Units completed but not transferred Ending units in process 15,000 7,000 1,000 10,000 (80% direct b 7,000 (75% conversion Materials, 65% Conversion costs) costs) Costs added by department: gDirect materials to Direct Labor Manufacturing Overhead (applied) 5,160 P12, 650 13,545 P9,805 6,625 aiyed to sona Required: For both departments: 1. Compute equivalent unit of production. 2. Prepare a separate cost of production report.
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.
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