The company uses the weighted average method to account for inventories. What is the equivalent units of work for direct materials and conversion cost for February
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.
New Era manufactures baseball-style hats. Material is introduced at the beginning of the process in the Cutting Department. Conversion costs are incurred (and allocated) uniformly throughout the process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Data for the Cutting Department for the month of February 2009 follow:
Work in process, January 31 50,000 units
100% complete for direct materials; 40% completed for conversion costs, actual costs of direct materials, $70,500; actual costs of conversion, $34,050
Units:
Started during February 225,000
Completed during February 200,000
Work in process, end 75,000
100% complete for direct materials; 20% completed for conversion costs
Direct materials added during February [actual costs] $342,000 Conversion costs added during February [actual costs] $352,950
The company uses the weighted average method to account for inventories. What is the equivalent units of work for direct materials and conversion cost for February?
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