Exercise 7-2. Equivalent Unit Computations 1. Increase in Units A company received from preceding dep't - 20,000; units transferred to the next dep't - 29,800, Work in Process, end - 1,200. What is the increase in units resulting from production? has the following production data: Work in Process, beg - 1,000 units; Units
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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Exercise 7-2. Equivalent Unit Computations
1. Increase in Units
A company has the following production
received from preceding dep't - 20,000; units transferred to the next dep't - 29,800, Work in
Process, end - 1,200. What is the increase in units resulting from production?
data:
Work in Process, beg
- 1,000 units; Units
2. Increase in Units
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An increase of 20% occurs at the start of the process upon addition of materials. Compute for
equivalent units of production using [a]FIFO and b] Average costing considering the
information below:
Work in Process, beg (2/7 done)
7.000 units
Received
from
Preceding
20,000 units
Work in Process, end (3/4 done)
9.000 units
3. Normal Loss - FIFO
The Nasiraan Manufacturing
following quantity data are on Dep't A's production in March:
WIP, beg
operates two consecutive producing departments, A and B. The
5,000 units, 1/5 done
Placed in Process
50,000 units
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WIP, end
3,000 units, 2/3 done
49,500
Transferred out
Compute for the equivalent units of production under each of the following independent
assumptions using FIFO costing: [a] Loss occurs at the beginning of the process; [b] Loss occurs
during process; [c] Loss is occurs when goods are % done; [d] loss occurs at the end of process.
Abnormal Loss - Average
The Loosan Manufacturing reported the quantity data from its operations for January:
WIP, beg
Placed in Process
7,500 units, 1/4 complete
75.000 units
4,500 units, 2/5 complete
WIP, end
Transferred out
74,250
Compute for the equivalent units of production under each of the following independent
assumptions using Average costing: [a] Loss occurs at the beginning of the process; [b] Loss
occurs during process; [c] Loss occurs when goods are 1/3 done; [d] loss occurs at the end of
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process.
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