ACCOUNT Work in Process-Forging Department ACCOUNT NO. Balance Debit Credit Debit Credit Date Item Nov. 1 Bal., 900 units, 60% completed 30 Direct materials, 12,900 units 30 Direct labor 30 Factory overhead 30 Goods transferred, ? units 30 Bal., 1,400 units, 70% completed 10,566 134,406 156,056 123,840 21,650 16,870 172,926
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 concerns production in the Forging Department for November. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $9,000 of direct materials.
Attachment
a. Determine the number of units transferred to the next department.
b. Determine the costs per equivalent unit of direct materials and conversion.
c. Determine the cost of units started and completed in November.
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