Units started 100,000 20,000 14,500 97,000 Work in process, beginning (35% complete) Work in process, end (70% complete) Transferred out Work in process beginning costs: Materials Conversion 60,000 40,000 All materials are added at the start of the process. The company inspect goods at 75% completion as to conversion. The cost per EUP for the current month are P4 and P6 for materials and conversion costs, respectively. Normal spoilage is 3.5% of the current month input. Weighted average method is used. How much is the cost assigned to the transfered-out units?
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 pertains to the production of Beautiful Company for the month of January 2022:
How much is the cost assigned to the transferred-out units?
A. 999,750
B. 970,000
C. 996,502
D. 1,005,000
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