Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing department. Information for the Cutting department for the month of May follows. Beginning work in process inventory Units started and completed Units completed and transferred out Ending work in process inventory Production cost information for the Cutting department follows: Beginning work in process Direct materials Conversion Costs added this period Direct materials Conversion $ 71,500 35,050 $ 348,040 341,280 Units 50,500 226,000 201,000 75,500 $ 106,550 689,320 Direct materials Percent Complete 100% 100% Conversion Percent Complete 45% 15% If Pitt Enterprises uses the FIFO method of process costing, compute the cost per equivalent unit for direct materials and conversion costs respectively for May
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.
![Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting
department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is
completed, the pieces are immediately transferred to the Sewing department. Information for the Cutting department for the
month of May follows.
Beginning work in process inventory
Units started and completed
Units completed and transferred out
Ending work in process inventory
Production cost information for the Cutting department follows:
Beginning work in process
Direct materials
Conversion
Costs added this period.
Direct materials
Conversion
$ 71,500
Units
50, 500
226,000
201,000
75,500
35,050 $ 106,550
$ 348,040
341,280
689,320
Direct materials
Percent Complete
100%
100%
Conversion Percent
Complete
45%
15%
If Pitt Enterprises uses the FIFO method of process costing, compute the cost per equivalent unit for direct materials and
conversion costs respectively for May](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F29a6cc4b-ac67-49e8-91c6-8d8e67d1350e%2Ff1f7edf8-0245-42e5-99bb-c78cf96baff0%2Fdljipjm_processed.jpeg&w=3840&q=75)
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