The Rugger Company uses a process costing system. During the period, 1,400 were started and 1,200 units were completed and transferred out. The units at the end of the period were 60% complete regarding materials and 40% complete regarding conversion, The cost of materials added during the current period amounted to $31,944; the cost of conversion added during the current period amounted to $30,016. 1. What are equivalent units for materials? 2. What are equivalent units for conversion? 3. What is the cost per equivalent unit for materials? 6. Refer to Table 2. What is the cost per equivalent unit for conversion?
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.
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