The information below was obtained from the records of the first processing department of California Corporation for the month of July. The company uses the weighted-average method in its process costing system. units percent completed: Labor and overhead work in process inventory, July 1 20,000 40% started during the month 70,000 completed during the month 80,000 Work in process inventory, July 31 ? 25% All materials are added at the beginning of the manufacturing process. The equivalment units for labor and overhead for the month is: 70,000 90,000 80,000 82,500
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 information below was obtained from the records of the first processing department of California Corporation for the month of July. The company uses the weighted-average method in its
| units |
percent completed: Labor and overhead |
|
| work in process inventory, July 1 | 20,000 | 40% |
| started during the month | 70,000 | |
| completed during the month | 80,000 | |
| Work in process inventory, July 31 | ? | 25% |
All materials are added at the beginning of the manufacturing process.
The equivalment units for labor and overhead for the month is:
Process costing is used where the product is generated through multiple processes. It is mainly used in the manufacturing departments.
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