Problem 12-4– Continued: Ending WIP Beginning WIP 100% Stage of Completion: 100% Transferred In Direct materials Direct labor Overhead 80% 40% 30% 70% 50% 40% Cost Data Beginning WIP Current period Transferred In Direct material Direct labor Overhead P132,000 49,920 13,440 7,160 P640,000 323,200 171,200 86,400 Required: 1. Compute the equivalent unit of production for direct materials, di- rect labor and overhead. 2. Prepare a cost of production report for the Curing Department for May 2018 using the FIFO method of process costing.
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.
Please analyze and compute the problems attached on the photos below.
Requirements:
- Compute the equivalent unit of production for direct materials, direct labor and overhead.
- Prepare a cost of productin report for the Curing Department for May 2018 using the FIFO method of
process costing .
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