11 21 To produce 1,000 units of the product, the standard prime costs are as follows : Direct labor Direct materials Materials Kilos A 500 Per kilo Amount Type Hours Per hour Amount P 150 P.10 P 50 70 х 30 Y 20 3 B C 350 400 1,250 20 30 60 120 240 50 100 100 310 Factory overhead has been estimated at the normal capacity of 1,200 hours as follows : Variable P 2,400 In producing 10,000 units of the product, the company incurred factory overhead of Eixed P 1,200 P3.320 and the prime costs of; Direct Materials Kilos 6,000 2,000 3,000 11,000 Materials А Per Kilo P.09 Direct labor Hours Per hour X Amount Туре Amount P1,402.50 650.70 1,158.30 P 3,211.50 540 275 P 5.10 B .22 440 Y 241 2.70 .33 1.95 990 P 1,970 594 1,110 532
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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