Computing Equivalent Units, FIFO and Weighted Average Cost Methods
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.
Computing Equivalent Units, FIFO and Weighted Average Cost Methods
Assume each of the following conditions concerning the data given:
-
All materials are added at the beginning of the process.
-
All materials are added at the end of the process. (Note that this would have to be a department subsequent to the first department for all materials to be added at the end of the process, but ignore that fact for purposes of this solution.)
-
Half of the materials are added at the beginning of the process, and the balance of the materials is added when the units are three-fourths completed.
In all cases, labor and factory overhead are added evenly throughout the process.
Trending now
This is a popular solution!
Step by step
Solved in 7 steps with 13 images
