Bokia, Inc. manufactures cell phone. It has two departments: Assembly Department and Testing Department. Direct materials are added when the Testing Department process is 90% complete. Conversion costs are added evenly during the Testing Department's process. As work in Assembly is completed, each unit is completed in Testing Department. As each unit is completed in Testing Department, it is immediately transferred to Finished Goods. Bokia, Inc. uses the FIFO method of process costing. Data for the Testing Department for June 2018 are: PRODUCTION DATA Quantity: units June units units Work in Process, June 1 Transferred In during 450 units Completed during June Work in process, June 30 Stage of Completion Ending WIP costs Transferred In 100% Direct naterials 0% Beginning WIP 0% Conversion costs 70x 60% COST DATA WIP, June 30 costs Transferred In P245,015 WIP, June 1 Conversion costs 100% 0 395,250 150 525 Direct materials 82,950 Questions: 1. What is the equivalent units of materials and conversion cost? 2. What is the cost per equivalent unit of materials and conversion cost? 3. What is the total cost of completed units from beginning work in process? 4. What is the total cost of units transferred out to finished goods? 75 P796,500 971,250
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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