Lenning Corporation uses the FIFO method in its process costing. The following data pertain to its Assembly Department for August. Percent Complete Work in process, August 1 Units started into production during August Units completed during August and transferred to the next department Work in process, August 31 Equivalent units of production Units 550 9,700 Materials Conversion 8,700 1,550 Materials 60% 70% Conversion 50% Required: Compute the equivalent units of production for both materials and conversion costs for the Assembly Department for August using the FIFO method. 40%
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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