The following information were gathered from the books of Broadway Company for the month of June 2015: Department A Department B Units: In process, beg. 30,000 20,000 Stage of completion 20% ¼ Finished and transferred 70,000 50,000 Finished and on hand 20,000 10,000 In process, end 10,000 ? Stage of completion 50% 40% Costs: In process, beg. P 45,000 P 24,000 Cost this month: Materials 120,000 130,000 Labor 30,000 29,000 Overhead 28,000 30,000 Requirement: Cost of Production Reports for two departments using FIFO and average method, under the following assumptions: 1. Materials are added at the start of the process
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 following information were gathered from the books of Broadway Company for the month of June 2015:
Department A Department B
Units:
In process, beg. 30,000 20,000
Stage of completion 20% ¼
Finished and transferred 70,000 50,000
Finished and on hand 20,000 10,000
In process, end 10,000 ?
Stage of completion 50% 40%
Costs:
In process, beg. P 45,000 P 24,000
Cost this month:
Materials 120,000 130,000
Labor 30,000 29,000
Overhead 28,000 30,000
Requirement: Cost of Production Reports for two departments using FIFO and average method, under the following assumptions:
1. Materials are added at the start of the process
2. Materials are added at the end of the process
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