What are quivalent units of production for conversion cost 2. Total costs of transferred out units 3. The amount of work in-process, end
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.
ABC Company has the following information for the current month:
Units started 175,000
WIP beginning(65% to be done) 35,000
Total spoilage 14,875
Spoilage within tolerance level 6,125
WIP ending (20% incomplete) 25,375
Transferred out ?
Beginning work in
Material 46,250
Conversion 60,675
Current Costs:
Material 170,625
Conversion 265,335
All materials are added at the start of the production process. ABC Corporation inspects goods at 100% completion as to conversion. Using the method that does not commingle the beginning and current period production activity.
Answer the following:
1. What are quivalent units of production for conversion cost
2. Total costs of transferred out units
3. The amount of work in-process, end
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