William Water Willards produces something that has two production processes. Data for November for the first process follows: Work in Process, November 1 Work in Process, November 30 Material cost in beginning WIP Conversion cost in beginning WIP A Units started into production Units transferred to second process Material cost added during November Conversion cost added during November % Completion Units Material Conversion 80,000 60,000 $76,600 $34,900 300,000 320,000 $410,000 $234,500 50% 45% 25% 20% Required: 1) Assume that the company uses the FIFO method of Process Costing. In a report format calculate the equivalent units and the cost per equivalent unit for November. 2) Determine the ending balance in the WIP account AND the total cost transferred to next process.
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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