Abraci Co. uses process costing. It reported the following accounting information: work in process on January 1, 20X1 at 2,000 units, all materials, 40% converted; processed and transferred out at 20,000 units; work in process on January 31, 20X1 at 4,000 units, all materials, 60% converted. Which of the following are Abraci Co.’s equivalent units of production if the company uses FIFO method? 20,000 units for materials and 20,000 units for conversion costs 21,600 units for materials and 22,000 units for conversion costs 24,000 units for materials and 22,400 units for conversion costs 22,000 units for materials and 21,600 units for conversion costs
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.
Abraci Co. uses
20,000 units for materials and 20,000 units for conversion costs
21,600 units for materials and 22,000 units for conversion costs
24,000 units for materials and 22,400 units for conversion costs
22,000 units for materials and 21,600 units for conversion costs
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