The cost of direct materials transferred into the Filling Department of Eve Cosmetics Company is $122,880. The conversion cost for the period in the Filling Department is $398,240. The total equivalent units for direct materials and conversion are 51,200 ounces and 52,400 ounces, respectively. Determine the direct materials and conversion costs per equivalent unit. If required, round to the nearest cent.
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.
The cost of direct materials transferred into the Filling Department of Eve Cosmetics Company is $122,880. The conversion cost for the period in the Filling Department is $398,240. The total equivalent units for direct materials and conversion are 51,200 ounces and 52,400 ounces, respectively.
Determine the direct materials and conversion costs per equivalent unit. If required, round to the nearest cent.
Equivalent Units: An equivalent unit of production is an expression of the amount of work done by a manufacturer on units of output that are partially completed at the end of an accounting period. Basically, the fully completed units and the partially completed units are expressed in terms of fully completed units.
Cost per equivalent units = Total cost / total equivalent units
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