Problem 5- Average Costing ABS Manufacturing had the following production for the month of July: Work in process at July 1 10,000 Started during July 40,000 Completed and transferred to finished goods 33,000 Abnormal spoilage incurred 2,000 Work in process at July 31 15,000 Materials are added at the beginning of the process. As to conversion cost, the beginning work in process was 70% completed while ending work in process is 40% completed. Spoilage is detected at the end of the process. Using the weighted average method, how many were the equivalent units for July for conversion cost?
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.
Problem 5- Average Costing
ABS Manufacturing had the following production for the month of July:
Work in process at July 1 10,000
Started during July 40,000
Completed and transferred to finished goods 33,000
Abnormal spoilage incurred 2,000
Work in process at July 31 15,000
Materials are added at the beginning of the process. As to conversion cost, the beginning work in process was 70% completed while ending work in process is 40% completed. Spoilage is detected at the end of the process. Using the weighted average method, how many were the equivalent units for July for conversion cost?
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