Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] The first production department of Stone Incorporated reports the following for April. Direct Materials Conversion Percent Complete 75% Percent Complete 25% Beginning work in process inventory Units started this period Completed and transferred out Ending work in process inventory Units 63,000 337,000 315,000 85,000 80% 30% Exercise 16-8 (Algo) Weighted average: Computing equivalent units of production LO P1 Compute the number of equivalent units of production for both direct materials and conversion for April using the weighted average method. Answer is complete but not entirely correct. Equivalent units production: Weighted average method Direct Materials Conversion Units Percent Percent EUP EUP Complete 100% V Complete Units started this period 315,000 V 315,000 100% 315,000 Ending work in process 85,000 85% X 72,250 X 35% X 29,750 X Total 400,000 387,250 344,750
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.
Equivalent units of production = Units completed and transferred out + (Ending work in process x Percentage of completion)
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