Space Ace Ltd makes candies for children. Materials are added at the beginning of the process and conversion costs are incurred evenly throughout the process. Data for August follows: Production data units percent complete units in process, sept 1 1750 60% units started into production 7000 units in process sept 30 2626 20% Cost data Work in progress August 1 materials $44625 labour $5250 manufacturing overhead $10500 Cost added materials $157500 labour $21000 manufacturing overhead $33075 Using the weighted average method, prepare a production cost report for the month of August
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.
Space Ace Ltd makes candies for children. Materials are added at the beginning of the process and conversion costs are incurred evenly throughout the process. Data for August follows:
Production data units percent complete
units in process, sept 1 1750 60%
units started into production 7000
units in process sept 30 2626 20%
Cost data
Work in progress August 1
materials $44625
labour $5250
manufacturing
Cost added
materials $157500
labour $21000
manufacturing overhead $33075
Using the weighted average method, prepare a production cost report for the month of August
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