Reported the following information on November: Units Work in Process, beg. (80% completed) 10,000 Completed & Transferred 27,000 Units Started 28,000 Work in Process, end (30% Completed) 8,000 Labor and Overhead Materials Transferred-In Costs for the month: Work in Process, beg. $65,048 $51,720 $80,624 Added during the month $194,224 $145,880 $234,320 All materials are added at the beginning of the process. Inspection occurs 60% of the way through the process. Normal spoilage is 10% of the good units completed. What is the equivalent units for conversion. Company uses weighted average method.
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.
Reported the following information on November:
| Units | |
| Work in Process, beg. (80% completed) | 10,000 |
| Completed & Transferred | 27,000 |
|
Units Started |
28,000 |
| Work in Process, end (30% Completed) | 8,000 |
| Labor and Overhead | Materials | Transferred-In | |
| Costs for the month: | |||
| Work in Process, beg. | $65,048 |
$51,720 |
$80,624 |
| Added during the month | $194,224 | $145,880 | $234,320 |
All materials are added at the beginning of the process. Inspection occurs 60% of the way through the process. Normal spoilage is 10% of the good units completed. What is the equivalent units for conversion. Company uses weighted average method.
Equivalent units of production:
In the manufacturing process, all the input could not be turned into finished goods. There would be some work in progress remained at the end of the period. While calculating the costs and allocating them per unit, the unfinished goods would be converted into finished units based on the percentage of work done on them. These converted units along with finished goods is called equivalent units of production.
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