JBH Chemicals Company produces "SUPER GLUE", an industrial grade adhesive. The product passes through several processes. Details of the first process "Polymerization", for the month of January, are given below: Production data Units Rupees opening work in process 1000 Material(100% complete) 49,700 Conversion(25% complete) 9,438 Units transferred to process 2 4250 ? Cost incurred during the period Materials 250,000 Conversion 215,000 Closing work in process 750 Materials(100% completed) ? Conversion(50% completed) ? There were no process losses in the month of January. Required: 1. Prepare and calculate the quantity schedule for the month of January? 2. Prepare and calculate the equivalent production units for the month of January? 3. Prepare Cost of Production Report for the month of January? 4. Prepare the Statement of total cost accounted for, for the month of January? 5. What is the difference between Equivalent production unit (EPU) and units completed? 6. Which industry do require to prepare Cost of Production Report? Give at least three names of comapanies who do prepare 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.
JBH Chemicals Company produces "SUPER GLUE", an industrial grade adhesive. The product
passes through several processes. Details of the first process "Polymerization", for the month of
January, are given below:
Production data Units Rupees
opening work in process 1000
Material(100% complete) 49,700
Conversion(25% complete) 9,438
Units transferred to process 2 4250 ?
Cost incurred during the period
Materials 250,000
Conversion 215,000
Closing work in process 750
Materials(100% completed) ?
Conversion(50% completed) ?
There were no process losses in the month of January.
Required:
1. Prepare and calculate the quantity schedule for the month of January?
2. Prepare and calculate the equivalent production units for the month of January?
3. Prepare Cost of Production Report for the month of January?
4. Prepare the Statement of total cost accounted for, for the month of January?
5. What is the difference between Equivalent production unit (EPU) and units
completed?
6. Which industry do require to prepare Cost of Production Report? Give at least three names of
comapanies who do prepare Cost of Production Report?
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